Karnali Pushes 20 MW Hydropower Plan as Province Bets on Local Investment

Karnali Province is moving to turn its huge water resources into local economic gains, with a new plan to develop hydropower projects of up to 20 MW in partnership with the federal government. Chief Minister Yajnaraj Joshi said the projects will be pursued under the Karnali ko Pani-Janata ko Lagani campaign, a model built around public-private partnership and local participation.

The initiative is aimed at keeping more of the province’s hydropower value inside Karnali, where electricity development has long lagged far behind potential. Recent reporting has noted that Karnali has an estimated power potential of around 18,000 MW, but only a tiny fraction of that capacity is currently being produced.

Under the new approach, local residents will be able to invest directly in the projects, including the Jagadulla project now under construction in Dolpa. That makes the announcement more than a power-sector update. It is also a political and economic message: Karnali wants to be a shareholder in its own energy future, not just a resource supplier for the rest of the country.

A small-project strategy with big ambitions

The government’s focus on projects up to 20 MW suggests a pragmatic shift. Smaller hydropower developments can often move faster than major megaprojects, require less complex financing, and offer a clearer path for local ownership. In a province where many larger projects have been delayed by funding gaps, licensing issues, or slow construction, that could matter a great deal.

Karnali’s broader hydropower landscape shows both promise and frustration. National and regional reports have described dozens of projects in various stages of survey, licensing, and construction, while actual generation remains far below the province’s theoretical potential.

That gap helps explain why the provincial government is leaning into a public-private partnership model. By bringing in local investors, the province may be trying to build stronger political support, reduce financing pressure, and create a more visible link between power projects and household benefits.

Why local investment matters

Allowing residents to invest could change how hydropower is perceived in Karnali. Instead of being seen only as a distant infrastructure project, it becomes a local asset with direct financial participation. If the model works, it could help spread returns more widely across communities that have historically seen limited benefits from large-scale development.

The Jagadulla project in Dolpa is an important test case for that idea. As a project already under construction, it offers a visible example of how the province hopes to combine infrastructure building with citizen investment. If successful, the model could be expanded to other small and medium hydropower schemes in the region.

The bigger picture for Karnali

Karnali has long been described as a hydropower giant waiting to be fully tapped. Feasibility studies on the Karnali, Tila, and Bheri river systems point to enormous generation potential, and several large projects across the basin have drawn attention from public and private developers alike.

But the province’s challenge has never been potential alone. It has been execution. Financing, transmission, environmental clearance, and project management have all slowed progress. That is why the province’s new emphasis on smaller projects may be strategically important: they are easier to package, easier to explain to investors, and potentially easier to complete.

If the plan succeeds, it could create a new development pattern for Karnali, one where local capital, provincial policy, and federal coordination work together to unlock long-stalled energy opportunities. For a province sitting on some of Nepal’s richest water resources, that shift could be significant.