The Unseen Cost of a 'Just Transition': Indigenous Rights at Risk in Nepal's Renewable Energy Projects

Written on 23 May 2025. Posted in News

BY DURGA MANI RAI FOR INDIGENOUS DEBATES

The concept of just transition is central to the global discourse on climate change, environmental justice, and sustainable development. It promises to ensure that no people, workers, regions, or sectors are left behind in the shift from a high-carbon to a low-carbon economy. For Indigenous Peoples, 'just transition' is not merely about shifting to renewable energy; it is about recognizing their rights, sovereignty, and authority over ancestral lands, waters, and resources. Indigenous Peoples view the Earth as sacred, not as a resource to be exploited. This perspective is completely denied in Nepal’s ambitious hydropower plans.

Nepal, a small Himalayan nation with a total area of 147,181 square kilometers, is nestled between China and India. Known as the 'Third Pole' and the 'Asian Freshwater Tower,' it is home to over 6,000 rivers, with an estimated theoretical hydropower potential of approximately 83,000 MW. Nepal ranks as one of the world’s richest countries in water resources. The country has long viewed hydropower as the key to its economic transformation. The government has prioritized hydropower development not only for energy transition and climate mitigation but also as a pathway to economic prosperity.

According to the 2021 population census report, Indigenous Peoples, also known as Adivasi Janajati, make up around 35.08% of Nepal's total population of 29,164,578. However, Indigenous experts, scholars, and organizations argue that their population exceeds 50%. There are 60 Indigenous groups officially recognized, while the 2021 census report lists 19 additional Indigenous groups that have yet to be recognized.

Indigenous Peoples in Nepal have endured centuries of systematic discrimination, colonization, racism, exclusion, and marginalization in social, cultural, political, and economic spheres. Over the past 250 years, the modernization efforts—such as state-building, land and resource nationalization, cultural assimilation, territorial reorganization, power centralization, infrastructure development, forced labor, and the shift from feudalism to capitalism—have significantly harmed Indigenous Peoples.  Nepali society remains highly stratified, with the state-imposed Hindu caste system favoring upper castes (Bahun and Chhetri), who occupy key positions in the state. Nearly half of the population within 90% of Indigenous groups lives in extreme poverty.

Legal Commitments vs. Threats

National Climate Change Policy 2019 aims to reduce the vulnerabilities of communities, build the resilience of ecosystems, and mobilize international financial resources in a just manner to contribute to the socio-economic prosperity of the nation by building a climate-resilient society. Nepal’s Long-term Strategy for Net-Zero Emissions 2021 aims to achieve net-zero greenhouse gas emissions by 2045.

During the 28th Conference of the Parties (COP 28) to the United Nations Framework Convention on Climate Change held in December 2023 in Dubai, Nepal committed to achieving net-zero greenhouse gas emissions and fully utilizing hydropower potentials to secure clean energy. The energy transition plan outlined in the Second Nationally Determined Contribution of 2020 aims to generate 15,000 MW (1,400 MW baseline in 2021) of clean energy by 2030. However, it aims to generate only 5,000 MW using national resources. The Fifteenth Plan (Fiscal Year 2019/20 – 2023/24) aims to develop 40,000 MW of electricity by 2044.

Nepal ratified the International Labour Organization (ILO) Convention No.169 and the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) in 2007. Articles 51(b)(3) and 51(j)(8) of the Constitution of Nepal 2015 commit to implementing international treaties and ensuring Indigenous Peoples’ rights to a dignified life, identity, and participation in decision-making processes. In 2023, the Supreme Court of Nepal issued a mandamus order directing the government to implement the ILO Convention 169, UNDRIP, the UN Guiding Principles on Business and Human Rights, and the Declaration on the Right to Development in the context of development projects. Yet, these treaties have not translated into meaningful change on the ground.

The Committee on the Elimination of Racial Discrimination (CERD) has expressed concerns about the absence of laws guaranteeing Indigenous Peoples’ rights to own, use, and develop their traditional lands and resources. Despite Nepal’s legal frameworks, Indigenous Peoples continue to face systemic exclusion. 

Indigenous Peoples are defending their land, resources, and self-determination against the threat posed by clean energy projects, which have led to land dispossession, forced evictions, militarization, and environmental harm. These projects jeopardize Indigenous cultural identity, spirituality, and livelihoods. Despite growing movements advocating for sovereignty and self-determination, the government and developers continue to push these aggressive energy projects in the name of development and decarbonizing the economy.

Case Studies: The Human Cost of Energy Projects

Currently, 81 hydropower projects are in operation, 180 are under construction, and 311 are undergoing license surveys. The state, private entities, public institutions, and International Financial Institutions are investing in these projects as they continue to commit to increasing their roles as climate banks. Nearly all of them are located within the traditional territories of Indigenous Peoples. Nevertheless, the Free, Prior and Informed Consent (FPIC) of the affected communities has been routinely ignored. Accordingly, the pursuit of renewable energy projects is revealing the darker side to this transition—one that disproportionately impacts Indigenous Peoples and their rights to land territories and resources and self-determination.

1. World Bank-financed Bharatpur-Bardaghat Transmission Line

The World Bank-financed Bharatpur-Bardaghat 220kV power transmission line, part of the Nepal-India Electricity Transmission and Trade Project, is in operation in Binayi Tribeni Rural Municipality-2, Nawalparasi district. Implemented by the Nepal Electricity Authority, the state-owned corporation, the project caused significant adverse impacts on Indigenous and local communities, including damage to homes, schools, cultural sites, agricultural lands, and the environment, and posed health and safety risks. The affected communities filed a complaint with the World Bank's Inspection Panel on October 18, 2021.

The World Bank Board approved an investigation into the project on March 3, 2022. The parties involved agreed to pursue dispute resolution, and a Dispute Resolution Agreement was signed on April 11, 2023. However, nine signatories withdrew from the process, and those dissatisfied with the resolution filed a case against the project in the Supreme Court with support from the Lawyers’ Association for Human Rights of Nepalese Indigenous Peoples (LAHURNIP). The case is still pending.

2. European Investment Bank-Financed Marshyangdi Corridor Transmission Line

The 220 kV Marsyangdi Corridor transmission line project in Lamjung district, funded by the European Investment Bank, has raised significant concerns regarding Indigenous Peoples’ rights. The bank has financed €95 million for the project, which is part of a broader investment in Nepal’s hydropower sector. The project has failed to uphold the Indigenous Peoples' right to FPIC, violated the bank’s social and environmental safeguards, and breached its finance contract with Nepal Electricity Authority. In 2018, affected communities filed a complaint with the bank’s accountability office, which issued an investigation report in 2021 that identified grave human rights violations and recommended corrective actions, including halting the Marsyangdi Corridor project until the violations are addressed.

Though the bank suspended further disbursements, the affected communities continue to press for the implementation of the report's recommendations. Despite this, the Nepal Electricity Authority and the bank are pushing forward with the project, supported by security forces. Legal and strategic support for the communities is provided by LAHURNIP and the Accountability Counsel, a US-based legal organization working to hold development banks accountable for their social and environmental policies and human rights.

3. Asian Development Bank-Financed Tamakoshi-Kathmandu Transmission Line

In Kathmandu’s Shankharapur municipality, Indigenous Tamang communities have been protesting against the Asian Development Bank-financed Tamakoshi-Kathmandu 200/400 kV Transmission Line and substation projects for the past 5 years. The substation is being built in a populated area, while the transmission line crosses homes, lands, and sacred sites. In January 2023, the Nepal Electricity Authority deployed security forces to forcefully begin survey work, leading to protests and the detention of 10 community leaders, including women and a minor. Despite filing complaints through multiple grievance mechanisms, including the National Human Rights Commission and the Asian Development Bank Nepal Resident Mission, the communities’ demands for FPIC have been ignored.

The government also set up an Armed Police Force camp at the site, further escalating tensions. The use of security forces to suppress Indigenous protests has become a concerning pattern. Police were deployed to intimidate and arrest community members. On 16 January 2025, 18 protesters were brutally beaten and arrested, with six detained for nine days and coerced into signing agreements to stop their protests, criminalizing their resistance. On February 4, LAHURNIP filed a complaint with the complaint mechanism of the Asian Development Bank.

A Call for a Truly Just Transition

Nepal’s transition to renewable energy must not come at the expense of Indigenous Peoples' rights. A just transition is not only about reducing carbon emissions; it must also center the rights, dignity, and self-determination of the Indigenous Peoples who have stewarded the Earth for generations. 

The cases in Nawalparasi, Lamjung, and Shankharapur are just a few examples of how this transition is negatively affecting Indigenous Peoples in Nepal. It is the legal duty of the Government of Nepal to translate ILO Convention No.169, the UNDRIP, and court orders into action to ensure that the just transition is genuinely just for Indigenous Peoples. It is imperative that the state, policymakers, developers, and International Financial Institutions respect the rights of Indigenous Peoples and sovereignty in the context of the just transition.

Will Nepal’s energy transition become a model for environmental justice, or will it continue to prioritize economic growth at the expense of its Indigenous Peoples? The answer depends on whether the state, policymakers, developers, and international financiers are willing to listen to the voices of those who stand to lose the most in this transition.

Durga Mani Rai (YAMPHU) is an Indigenous lawyer, human rights defender and member of the Lawyers' Association for Human Rights of Nepalese Indigenous Peoples (LAHURNIP).

Cover photo: The community discusses with the World Bank Inspection Panel in Binayi Tribeni-2 rural municipality about the Bharatpur-Bardaghat transmission line. Photo: Durga Mani Rai/ LAHURNIP

Tags: Indigenous Debates