Socio-Economic Trade-offs of Large Hydropower Development for Community Livelihoods in Bagmati Province, Nepal

Gunaraj Neupane (), Yutthapong Pianrog (), Kua-anan Techato () and Hari Prasad Ghimire ()
Additional contact information
Gunaraj Neupane: Faculty of Environmental Management, Sustainable Energy Management, Prince of Songkla University, Hat Yai, Thailand
Yutthapong Pianrog: Faculty of Environmental Management, Sustainable Energy Management, Prince of Songkla University, Hat Yai, Thailand
Kua-anan Techato: Faculty of Environmental Management, Sustainable Energy Management, Prince of Songkla University, Hat Yai, Thailand
Hari Prasad Ghimire: Faculty of Environmental Management, Sustainable Energy Management, Prince of Songkla University, Hat Yai, Thailand; & Everest Center for Research and Development Partners, Kathmandu 44600, Nepal.

International Journal of Energy Economics and Policy, 2026, vol. 16, issue 2, 1194-1203

Abstract: Large hydropower development is widely promoted as a pathway for sustainable energy transition and economic growth, particularly in mountainous countries such as Nepal. However, its socio-economic implications at the community level remain contested. This study examines the impacts of large hydropower development on community livelihoods in Nepal's Bagmati Province using secondary time-series data covering the period 2015-2024. Guided by the Sustainable Livelihoods Framework, the study employs descriptive analysis, correlation analysis, multiple regression, and factor analysis to assess relationships between infrastructure development, employment, income, environmental impacts, and displacement. The results reveal a clear development-displacement paradox. While infrastructure development and household income increased over time, environmental impacts emerged as the strongest driver of displacement, outweighing the mitigating effects of economic and infrastructure gains. Employment and income improvements alone were insufficient to offset livelihood disruption. Factor analysis identified two dominant pathways: an economic-infrastructure pathway that enhances physical and financial capital, and an environmental-displacement pathway that erodes natural capital and increases livelihood vulnerability. The findings highlight that environmental degradation plays a central role in shaping livelihood outcomes in hydropower-affected areas. The study contributes empirical evidence from a Himalayan context and underscores the need for hydropower policies that prioritize environmental safeguards, livelihood restoration, and inclusive development to achieve socially sustainable energy transitions.

Keywords: Large hydropower; Sustainable Livelihoods Framework; displacement; environmental impacts; infrastructure development; Nepal (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://econjournals.com/index.php/ijeep/article/download/22755/9880 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:16:y:2026:i:2:id:22755

Ordering information: This journal article can be ordered from
https://econjournals.com/index.php/ijeep

DOI: 10.32479/ijeep.22755

Access Statistics for this article

More articles in International Journal of Energy Economics and Policy from International Journal of Energy Economics and Policy
Bibliographic data for series maintained by Monica Sinhat ().