Case brief: Balancing progress and rights — land acquisition in the context of renewable energy in Nepal

Despite Nepal possessing immense renewable energy potential, its persistent energy scarcity stems from its heavy reliance on traditional biomass and imported fossil fuels. For instance, hydropower accounts for only 3.5% of the total energy mix, with just 2% being harnessed as an energy source, even though the country’s projected capacity is 83GW, of which 45 GW is commercially viable.

Solar energy also presents a vast opportunity, given Nepal’s more than 300 sunny days per year, with a theoretical potential of 100 times greater than all other energy sources combined. However, the expansion of solar power faces major hurdles due to land constraints, as the country’s rugged terrain and highly fragmented land ownership make land acquisition for large-scale projects more difficult. Moreover, policy barriers have impeded the use of public land for large-scale renewable energy projects.

Similarly, wind energy remains largely untapped, with only a few small turbines supplying off-grid areas. Again, the country’s difficult terrain makes transporting large turbines to high-potential locations a logistical challenge, further compounded by the lack of sufficient data measurement stations and research on feasibility.

Other renewable sources, such as biogas and geothermal energy, also remain underdeveloped. Despite the identification of 29 geothermal springs, outdated expertise, limited trained personnel, inadequate infrastructure, and past project failures have hindered progress in utilising this resource.

While Nepal faces significant barriers in its transition to renewable energy, addressing policy constraints, improving infrastructure, and creating more opportunities for investments and research will be essential in unlocking its renewable energy potential to contribute to its long-term energy security.

Read the full case brief to find out how Nepal can ensure equitable treatment, community inclusion, and fair compensation to build a renewable energy future that is not only economically viable, but socially just and sustainable too.

Authors: Sambigya Khadka, Prem Nepali, and Nikka Rivera
Published: 2025
Source: Land Matrix Asia Regional Focal Point: Asian Farmers’ Association for Sustainable Rural Development (AFA)