Volume 37, Issue 3

May 2021
Special Issue on Hydropower-based Collaboration in South Asia: Socio-economic Development and the Electricity Trade

Foreword »

Water as an engine for regional development

Asit K. Biswas

Editorial »

Hydropower as a catalyst for regional cooperation in South Asia

Cecilia Tortajada and David J. Molden

Research Article

The role of hydropower in South Asia’s energy future

Ramesh Ananda Vaidyaa, David James Moldena, Arun Bhakta Shresthaa, Nisha Waglea and Cecilia Tortajadab,c

aInternational Centre for Integrated Mountain Development, Kathmandu, Nepal; bSchool of Interdisciplinary Studies, University of Glasgow, Glasgow, UK; cInstitute of Water Policy, Lee Kuan Yew School of Public Policy, National University of Singapore

Contact: Ramesh Ananda Vaidya | Email: Ramesh.Vaidya@icimod.org, rvaidya@alum.mit.edu


With rising energy demand in Asia, the high potential for hydropower development and the need for low-carbon energy development, hydropower would seem to have a significant role in South Asia’s energy future. However, the extent of hydropower development will depend on several risk factors, including the cost of alternative energy sources, the environmental sustainability of hydropower and social issues of equitable development. Using a risk-analysis framework, it is concluded that the future of hydropower will depend on how well policies and institutions manage the risks, facilitate efficient financial markets, and promote fair and friendly cross-border electricity trade.

Pages: 367–391

https://doi.org/10.1080/07900627.2021.1875809 (Open Access)

Research Article

Regional electricity trade for hydropower development in South Asia

Govinda R. Timilsina

Development Research Group, World Bank, Washington, DC, USA

Contact: Govinda R. Timilsina | Email: gtimilsina@worldbank.org


This study examines the importance of enhancing cross-border transmission interconnections and regional electricity trade to promote hydropower in the South Asia region and it quantifies the potential of hydropower development and trade under alternative scenarios. The paper shows that regional electricity trade is critical for the exploitation of the untapped hydropower resources in South Asia. It finds that hydropower capacity would increase by 2.7 times over the next two decades if a regional electricity market is developed. If a moderate carbon tax is added on top of it, hydropower capacity would be more than three times higher than the current level.

Pages: 392-410


Research Article

The political economy of electricity trade and hydropower development in eastern South Asia

Aditya Valiathan Pillaia and Sagar Prasaib

aCentre for Policy Research, New Delhi, India; bAsia Foundation

Contact: Aditya Valiathan Pillai | Email: aditya@cprindia.org


This article frames the political economy of electricity trade and hydropower development in eastern South Asia. It distils and analyzes four crucial variables in this regard: the health of distribution companies in India; the role of hydropower in India’s ambitious turn to renewable energy; Bangladesh’s power crisis and import dependency; and the governance of regional electricity trading arrangements. It argues that progress in both electricity trade and hydropower development in the region will be incremental in the next decade, hindered by mixed demand signals and the turbulence of geopolitics.

Pages: 411-423


Research Article

Water and hydropower cooperation in BBIN countries: policies and way forward

V. P. Haran

India Ministry of External Affairs

Contact: V. P. Haran | Email: vpharan16@gmail.com


The BBIN (Bangladesh, Bhutan, India and Nepal) region was a wellintegrated one till 1947, when new political boundaries were drawn. Since then, political and emotional reasons have stood in the way of regional cooperation even on mutually beneficial areas like water and energy security. But the increasing awareness among the people of the importance of regional cooperation provides an opportunity to move forward on critical issues. The article explores the current water and power situation, potential for cooperation among BBIN countries, and policy steps needed to strengthen cooperation in these areas for the benefit of the people of these countries.

Pages: 424-438


Research Article

Electricity trade and cooperation in the BBIN region: lessons from global experience

Ramesh Ananda Vaidyaa, Niru Yadavb, Nirjan Raic, Saumitra Neupanec and Aditi Mukherjia

aInternational Centre for Integrated Mountain Development, Kathmandu, Nepal; bIndependent consultant, Washington, DC, USA; cPolicy Entrepreneurs, Inc., Lalitpur, Nepal

Contact: Ramesh Ananda Vaidya | Email: Ramesh.Vaidya@icimod.org, rvaidya@alum.mit.edu


The acute shortage of electric power in South Asia has severely hampered regional economic growth. Cross-border electricity trade – supported by appropriate policies, institutions and grid interconnections – can be a powerful tool for improving people’s livelihoods in its Bangladesh–Bhutan–India–Nepal (BBIN) region. This paper reviews four cases of regional power trade and cooperation from four different continents – Asia, Africa, Latin America and Europe – and identifies six key elements that will be necessary for success in cross-border electricity trade in the BBIN region. It assesses the current status of these key elements in the BBIN countries and suggests areas for immediate intervention. Cooperation in the electricity sector in the region could be the building block for a larger regional cooperation in South Asia – and ultimately for regional economic integration.

Pages: 439-465


Research Article

Beyond hydropower: towards an integrated solution for water, energy and food security in South Asia

Golam Rasul, Nilhari Neupane, Abid Hussain and Binaya Pasakhala

International Centre for Integrated Mountain Development, Kathmandu, Nepal

Contact: Golam Rasul | Email: golam.rasul@icimod.org


South Asia is energy-poor, water-stressed, and food-deficient, and these problems are expected to intensify with high population growth, rapid economic growth and industrialization, urbanization, and changing climate. Although the water, energy, and food security challenges are interconnected, they are dealt with in isolation, which fails to address the challenge of trade-offs and exacerbates the problems. The increased resource scarcity underlines the need for integrated solutions which ensure optimal resource use and maximize benefits. This article uses a nexus perspective to explore possible integrated solutions that support multiple uses of water at different scales and times. The analysis shows that the potential of water resources is underdeveloped and synergies between water, energy, and food are not fully harnessed. With proper coordination and management, water resources can generate multiple benefits for both upstream and downstream areas, including regional public goods such as regional connectivity and flood and drought management.

Pages: 466-490

https://doi.org/10.1080/07900627.2019.1579705 (Open Access)

Research Article

Effectiveness of hydropower development finance: evidence from Bhutan and Nepal

Kaoru Oginoa, Jongmi Sona and Mikiyasu Nakayamab

aAsian Development Bank, Manila, Philippines; bGraduate School of Frontier Sciences, University of Tokyo, Chiba, Japan

Contact: Kaoru Ogino | Email: kogino@adb.org


Bhutan benefits from surplus power generation and associated export revenues, whereas Nepal suffers from power shortages and import deficits. They have contrasting hydropower development, taking different approaches and relying on different sources of development finance in hydropower projects. This study analyzed effective financing approaches for feasible hydropower projects under geopolitical constraints. The lesson learned from their comparison is strategic prioritization to select and consolidate international funds. Bhutan has attracted external finance to large projects for power export. However, Nepal failed to plan and use external funds from donors and private investors, resulting in small projects for only domestic consumption.

Pages: 491-507


Research Article

Topography and the hydraulic mission: water management, river control and state power in Nepal

Matthew I. Englanda and Daniel Hainesb

aSchool of Geography, University of Leeds, Leeds, UK; bDepartment of History, University of Bristol, Bristol, UK

Contact: Matthew I. England | Email: england_mi@yahoo.co.uk


This paper examines the Nepali state’s role in water management over time and space. Using the hydraulic mission model, it draws on historical material, policy documents and interviews. From the 1800s, state water management concentrated on the Kathmandu Valley. The 1960s witnessed the hydraulic mission launch in the Terai lowlands through the construction of public irrigation canals. Since the 1990s, a consolidating hydraulic mission climbed into the hills and mountains through hydropower development. It is argued that, over time, topography played a determining role in the application of state power and water control through infrastructure development, and that attention to geography helps refine the hydraulic mission model.

Pages: 508-530


Research Article

The role of hydropower in visions of water resources development for rivers of Western Nepal

Emily L. Pakhtigiana, Marc Jeulandb,c,d, Luna Bharatie and Vishnu Prasad Pandeye

aSanford School of Public Policy, Duke University, Durham, NC, USA; bSanford School of Public Policy and Duke Global Health Institute, Duke University, Durham, NC, USA; cInstitute of Water Policy, National University of Singapore; dRWI Leibniz Institute for Economic Research, Essen, Germany; eInternational Water Management Institute, Lalitpur, Nepal

Contact: Emily L. Pakhtigian | Email: emily.pakhtigian@duke.edu


Water resources can play significant roles in development pathways for water-endowed, low-income countries like Nepal. This article describes three visions for water resource development in the Karnali and Mahakali Basins of Western Nepal: state-led development, demand-driven development and preservation of ecosystem integrity. The analysis calls attention to water use trade-offs, including those resulting from national priorities such as infrastructure-based hydropower and irrigation, from local drinking water demand, and from environmental conservation concerns. While these visions of water resources development do diverge, common trends appear, including acknowledgment of water management’s role in expanding energy access and increasing agricultural productivity.

Pages: 531-558


Research Article

Cross-border electricity trade for Nepal: a SWOT-AHP analysis of barriers and opportunities based on stakeholders’ perception

Shobhakar Dhakal, Pratik Karki and Subina Shrestha

Department of Energy, Environment and Climate Change, School of Environment, Resources and Development, Asian Institute of Technology, Klong Luang, Thailand

Contact: Shobhakar Dhakal | Email: shobhakar.dhakal@gmail.com


Endowed with over 40,000 MW of economic hydropower potential relative to its nascent domestic demand, Nepal can export electricity to its power-deficit neighbours in the BBIN (Bhutan, Bangladesh, India and Nepal) region as a strategic economic opportunity. The untapped hydro potential in Nepal, coupled with BBIN’s complementary seasonal demand patterns, difference in peak load timing, and rapidly growing growth of electricity demand in Bangladesh and India, are favourable for regional electricity cooperation, especially for Nepal. This study uses the SWOT-AHP-TOWS approach to identify the key barriers and opportunities for cross-border electricity trade and to provide insights on possible strategies for Nepal.

Pages: 559-580