Author: Pauline Hörschelmann
Photo by: Falco Negenman, Unsplash
In Nepal, “green” hydropower is frequently lauded as a cornerstone of development and climate action. However, beneath this narrative lies a more concerning reality. Projects promoted under the auspices of decarbonization and a “just transition” have repeatedly advanced at the expense of Indigenous Peoples (IPs), resulting in the sidelining of their rights, lands, and livelihoods. For them, a genuine just transition is not simply about renewable energy, but about their rights to self-determination and to exercise authority over their ancestral lands (KIOS Foundation 2025, Rai 2025).
In this context, the principle of Free, Prior and Informed Consent (FPIC) becomes particularly relevant. It is intended to empower communities to give or withhold consent to projects affecting their lands and resources prior to implementation. However, despite its formal recognition in Nepal, FPIC is in most cases inadequately implemented or entirely overlooked, posing a significant threat to the livelihoods of Indigenous communities. This prompts a critical question: what measures can Nepal implement to ensure the effective implementation of FPIC?
A Source of Conflict
Nepal has an abundance of water resources, including over 6.000 rivers and a significant hydropower potential of 83.000 MW, which positions it as one of the world’s most water-rich nations.
By expanding the current hydropower sector, Nepal could strengthen its national income, reduce energy costs, alleviate poverty, and lessen its vulnerability to global oil price fluctuations. This feels especially urgent now, as the US–Israel–Iran war drives a new global energy crisis.
The increased electricity generation would support the country’s domestic development and create opportunities to supply clean, renewable energy to the wider South Asian region, thereby simultaneously contributing to climate change mitigation.
Although the government identifies hydropower as a pivotal component of Nepal’s energy transition, tensions frequently arise during the construction and operation of these projects. Disputes between companies, authorities, and local communities are a recurring phenomenon, typically centered on environmental impacts, compensation, and resettlement (Rai 2025, Neupane 2022).
This comes as no surprise. The prevailing notion of hydropower as a green energy source, disseminated both nationally and globally, overshadows the socio-ecological harms it inflicts on local communities, particularly on Indigenous communities, including dispossession and further marginalization.
The “green” transition, which in reality is characterized by the state’s prioritization of corporate interests and the transformation of rivers into economic commodities, appears to be inherently political, influenced by historical inequalities (Sharma & Sharma 2025).
Just an Illusion? – FPIC and the State of Indigenous Peoples‘ Rights in Nepal
According to the 2021 Census, the total population of Indigenous Peoples in Nepal is estimated to be approximately 10 million, at least 35% of the total population. Presently, the country officially recognizes 59 distinct groups as IPs.
For centuries IPs have been subjected to discrimination, marginalization, and exclusion. Their communities have been profoundly impacted by the nationalization of their land and resources, cultural assimilation, and the centralization of power, which are all consequences of state-led modernization.
And it appears that the situation has remained constant. Notwithstanding the ratification of pertinent treaties, substantial improvements remain elusive, and IPs continue to confront obstacles to securing their rights, accessing resources, and achieving adequate representation (Rai 2025, Shakya 2025).
It was only in June 2024 that the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), including the Free, Prior and Informed Consent (FPIC) provisions and, the ILO Convention No. 169 on Indigenous and Tribal Peoples were implemented by the Nepali government. While this step marks a significant milestone, it raises a more pressing question: will these promises lead to real change for the communities they are meant to protect?
For many IPs, land holds significance beyond mere sustenance and refuge, as it is intricately tied to cultural identity. However, the implementation of development projects, including hydropower projects, infringes upon these dependencies and connections, thereby disregarding the provisions established by these treaties.
In practice, violations of FPIC persist in the context of hydropower development, despite its central role in safeguarding IPs and local communities. Essentially, FPIC signifies a commitment to ensuring that projects are planned and executed in a way that is compatible with Indigenous culture and belief systems. It also affirms IPs’ rights to engage in the decision-making, planning, implementation, and evaluation processes of all projects that directly impact them.
Nepal’s shortcomings in implementing FPIC compromise its very purpose. In the absence of genuine consent, IPs are sidelined in decision-making processes, leading to conflict and human rights violations (Sunuwar 2025, Panta 2025).
Development, But at What Cost?
Violations of FPIC are not the fault of a single institution. They reflect a broader pattern involving actors such as the Nepal Electricity Authority, private developers and Multilateral Development Banks (MDBs). Their collective failures have had significant impacts on IPs. Through the repeated use of legitimizing narratives, alongside strategic action and inaction, these actors effectively disenfranchised IPs and, in some cases, pre-empted project outcomes.
This is especially prevalent in four major projects in Nepal: Likhu Project, Tanahu Project, Upper Trishuli-1 (UT-1) Project, and Upper Arun Project. Throughout all projects, FPIC was either entirely ignored or deficiently implemented. Repeatedly, people were offered little more than basic one-way information sessions, and FPIC processes were initiated only after the securing of project approvals or during the implementation phase.
Affected communities have reported that information is often withheld, compensation is inadequate, and, in some cases, people who voice opposition to the projects face retaliation.
The MDB-financed hydropower projects have resulted in displacement, environmental degradation, the loss of cultural heritage, livelihoods, and traditional knowledge. Reports of social conflicts that posed risks to physical safety and security have surfaced (Chakrabarty & Rai 2025).
These violations of FPIC are in direct contravention to international law. Under the legal frameworks, Nepal is obligated to consult with the affected parties prior to any action.
Despite Nepal’s ratification of ILO Convention 169, it has yet to establish explicit guidelines for its implementation. Authorities frequently require training, developers prioritize administrative tasks over community engagement, and IPs remain underrepresented or entirely absent in decision-making or consultation processes. Meanwhile, international lenders frequently depend exclusively on the developers’ self-reported data regarding the projects (Panta 2025).
No Development Without Rights
To avert future violations of IPs’ rights, the Nepali government must ensure the implementation of the following recommendations:
- establish an autonomous grievance redress mechanism for affected communities;
- formally recognize and protect the customary land rights of IPs, thereby conferring upon them a legitimate legal standing;
- devise mechanisms that ensure the inclusion of Indigenous women and youth in all consultations and decisions-making processes;
- devise mechanisms that will strengthen environmental assessments with the objective of integrating Indigenous knowledge and considering impacts that extend beyond the physical infrastructure;
- enshrine FPIC in national law, ensuring its legal binding. This requires precise procedures, enforceable penalties for violations, and comprehensive training for local and provincial governments in ILO 169, UNDRIP, and rights-based approaches to development (Panta 2025).
These issues go far beyond hydropower. Development projects of various kinds inflict harm upon marginalized communities, with Indigenous Peoples being particularly vulnerable. It is crucial for Nepal to take immediate action. Ensuring the protection of rights, the preservation of cultural heritage, and the active involvement of Indigenous communities in decision-making processes that impact their lands and way of life is of paramount importance.
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Author Introduction
Pauline Hörschelmann is a Master student in International Relations and Development Policy at the University of Duisburg-Essen in Germany. She has a particular academic interest in climate justice issues, international climate policies, and climate change mitigation and litigation strategies. She is currently writing her master's thesis about Vanuatu's negotiation strategies in the context of the landmark International Court of Justice case, in which an advisory opinion was given regarding states' obligations in respect to climate change.