An Analysis of the Barriers to Cross Border Trade in Hydroelectricity in the Himalayas

Eric Strahorn


There are many assumptions held by policymakers and scholars about the potential for hydroelectricity in the Himalayas. The first assumption is that the Himalayan rivers of Bhutan, India, and Nepal possess a vast untapped source of hydrolectricity. The second is that the benefits of realizing this potential will provide for a routine cross border trade in relatively clean and sustainable electricity that will support economic growth throughout the region. The third is that despite the perceived benefits there are longstanding barriers that have prevented large scale hydroelectric development.
Oseni and Pollitt (2016) argue that it would be worth understanding what barriers stand in the way of expanding cross border trade in electricity in South Asia and how they can be overcome. There have been, however, numerous attempts to identify and analyze these barriers. This literature includes studies from the Asian Development Bank, the South Asian Association for Regional Cooperation, the World Bank as well as individual scholars.
Most of these works focus on certain aspects of the issue, but tend to overlook a few important points. This paper will docus on two and argue that, firstly, the potential for hydroelectricity in Himalayan rivers has been exaggerated and needs to be reconsidered. Secondly, the barriers to hydropower development are not, as often assumed, simply technical questions regarding engineering strategies, environmental impact assessments, regulatory reforms or project financing. Instead, the barriers are much greater. Once barrier is the hydroelectric dam itself. The megadams required to sustain a cross border trade in electricity are highly problematic. Another barrier is the legacy of decades of failed hydro-diplomacy especially between India and Nepal.


Himalayan Rivers, Nepal, India, Bhutan, hydroelectricity

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