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Annapurna Rural Municipality has been gradually establishing itself as Nepal’s emerging “hydropower hub” over the past decade. With rivers such as the Kaligandaki, Mistri, Nilgiri, Rele, Ghalemdi, and Ghar Khola being transformed into sources of energy production, the area has witnessed rapid economic, social, and physical development. However, alongside hydropower expansion, concerns have also been rising regarding environmental impacts, biodiversity conservation, and the future of natural hot springs.

According to Annapurna Rural Municipality Chairperson Bharat Kumar Pun, there are currently six operational hydropower projects in Annapurna with a combined capacity of 176 MW, while three projects with a total capacity of 255.5 MW are under construction. In the Narchyang area, the 5 MW Ghalemdi Khola, 42 MW Mistri Khola, 38 MW Nilgiri-1, 71 MW Nilgiri-2, and 6 MW Rele Khola projects are in operation. Additionally, the 14 MW Ghar Khola hydropower project in the border area of Wards 5 and 6 has also begun operation.

Similarly, construction has started on the 180 MW Kaligandaki Gorge hydropower project in the Bhalebas area of Narchyang. The Super Ghalemdi (9.14 MW) and Middle Kaligandaki (66.5 MW) projects are under construction. The IME Group is also preparing to advance the 66 MW Tiplyang Kaligandaki project.

Annapurna: A Hydropower Center

The history of hydropower development in the Annapurna region began in 1988–89, with the 2 MW Tatopani small hydropower project built by the Nepal Electricity Authority. After a long period of limited activity, the region has recently become a major energy hub due to increased private sector investment.

In 2019–20 , the 5 MW Ghalemdi Khola project came into operation, followed by Mistri Khola, Nilgiri-1, Nilgiri-2, Ghar Khola, and Rele Khola projects. Investors have been increasingly attracted after the construction of the Dana substation and transmission line, said Ghalemdi Hydro director Pramod Shrestha.

Transformation of Narchyang

Ward No. 4 Narchyang of Annapurna Rural Municipality has become a hydropower center. Projects completed and under construction have significantly transformed the village. Ward Chair Lok Bahadur Fagami said that Narchyang, once inaccessible by road, is now connected through roads, bridges, and other infrastructure built due to hydropower development.

“We never imagined roads could be built through such steep cliffs. Employment and income opportunities have been created in the village itself,” he said.

With around 450 households and a population of 1,600, the number of workers brought in by hydropower projects now exceeds the local population. Land prices have risen to Rs 3–3.5 million per ropani. Many people who had migrated abroad or to cities are returning home.

According to hotel entrepreneur Tek Bahadur Pun, who returned from Pokhara to run a hotel, opportunities in the village have eliminated the need to live outside.

Locals are earning income through compensation for land, hotel businesses, agriculture, livestock, transportation, supply of construction materials, contracting, and share investments.

Rising Municipal Income

Royalties from hydropower projects have significantly increased the rural municipality’s income. Through the Natural Resources and Fiscal Commission, Annapurna received Rs 7 million in royalties in the previous fiscal year. This year, the amount has increased to Rs 17 million, said Chief Administrative Officer Kapil Pandey.

In addition, projects are conducting corporate social responsibility programs in education, health, skills development, tourism promotion, and environmental conservation. The operation of a hydropower engineering course at Prabha Secondary School for the past five years is one such outcome.

Locals Not Fully Benefiting Long-Term

Although hydropower projects have increased economic activity, local communities are still not fully prepared to gain long-term benefits. Most locals have benefited from compensation, wages, or construction-phase jobs, but lack strategic planning for post-construction economic participation.

Once construction is completed, job opportunities decline, so experts and local leaders emphasize the need for long-term investment in agriculture, tourism, services, and entrepreneurship.

People in affected areas have also invested in project shares. In the Mistri Khola project alone, locals invested more than 1.7 million shares. Other projects are also preparing to issue shares for local residents.

Environmental Challenges Rising

Environmental concerns have also increased alongside hydropower development. Locals report that reduced river flow has affected fish and other aquatic species habitats.

According to Narchyang resident Avin Chochangi, there used to be abundant fish in the Mistri Khola, but after water was diverted through tunnels, aquatic life has nearly disappeared. Ward Chair Fagami also noted impacts such as loss of aquatic species, drying of traditional water sources, and reduced wildlife movement.

Although minimum flow is maintained in rivers, locals say the natural ecosystem is still being affected. There are growing demands for more effective environmental impact monitoring and studies.

Concerns Over Hot Springs

Natural hot springs in the Annapurna region are also believed to be at risk due to hydropower projects. Locals in Bhurung Tatopani, Paudwar, Ratopani, and Sekarku areas fear that diversion of river water through tunnels could impact natural hot springs.

According to Bhurung Tatopani resident Anil Hirachan, changes in Kaligandaki’s flow may threaten hot spring sources. Since these hot springs are an important base for tourism and local income, conservation has become a major concern.

Need for Long-Term Strategy

Experts and local leaders suggest that hydropower development should not be limited to compensation and wage labor. They recommend linking agriculture with project markets, establishing energy-based industries, integrating tourism with hydropower, and providing technical training for local youth.

The rural municipality has also begun preparing long-term policies to connect hydropower development with overall economic transformation, said Chair Pun. He emphasized that royalty income should be invested in productive sectors rather than consumption-oriented spending.