Hydropower and SEZs Central to Nepal’s Vision of Regional Industrial Decarbonisation

In a statement to the Asia Society in New York, Nepal’s Foreign Minister Shishir Khanal underscored hydropower and Special Economic Zones as the twin pillars of the country’s regional economic agenda.

Nebal’s twelve major rivers are estimated to generate around 43 GW of commercially viable hydroelectric power. The minister set an ambitious target of reaching 28 GW by 2035, a capacity that would not only meet Nepal’s growing demand but also fuel a clean‑energy export pipeline to India and Bangladesh, helping those economies decarbonise their industrial base.

To translate this energy surplus into industrial growth, Khanal proposed the development of SEZs along the open border with India’s five adjoining states. These zones would combine low‑cost green electricity with streamlined customs and logistics, creating an attractive hub for manufacturers seeking a resilient, cost‑effective supply chain.

Khanal also highlighted that Nepal’s open borders, covering more than 1,700 km, link over 400 million people, providing a massive market and labour pool. By integrating hydropower and SEZs, Nepal aims to become a conduit for clean manufacturing, attracting both regional and global investors.

The minister’s remarks positioned Nepal as a proactive player in South Asian economic integration, ready to turn its natural resources into engines of sustainable industrial development.