Private Sector Involvement in Nepal’s Hydropower Sector: Issues, Challenges, and Growth Potential

Abstract

This research delves at the pros and cons of private sector participation in Nepal's hydropower development. The study's overarching goals are to (1) catalogue the sector's most pressing problems; (2) analyse the function of private investment; (3) assess the efficacy of current policy and institutional frameworks; (4) investigate potential avenues for more public engagement; and (5) propose measures to strengthen the relationship between the public and private sectors. The study uses a mixed-methods research strategy, combining quantitative survey results with statistical analysis and qualitative interview and document analysis. Delays in regulation, limitations on available funding, and insufficient transmission infrastructure were among the primary concerns highlighted by the thematic analysis. Statistical packages used for quantitative data analysis included SPSS for descriptive statistics, chi-square tests, correlation, and regression. A whopping 85% of private developers voiced concerns about funding limitations, while 72% brought up the issue of regulatory delays. There was a statistically significant correlation between well-defined policies and involvement from the business sector, according to chi-square analysis (p = 0.009). Evidence from regression analysis shows that two important factors that can be used to forecast private investment are policy support (β = 0.42, p = 0.000) and access to financing (β = 0.33, p = 0.001). The findings support the research assumptions and show that private sector expansion requires a policy climate that is favourable and improved access to capital. The paper provides actionable policy suggestions to encourage sustainable hydropower development in Nepal by increasing private sector involvement.