Discussions Conclude on Addressing Hydropower Insurance Challenges

August 7th, 2025

Kathmandu — The Nepal Insurance Authority (NIA) has convened a high-level discussion with key stakeholders to address the ongoing challenges in insuring Nepal’s hydropower sector. The meeting, held at the Authority’s central office in Kupandol, brought together representatives from the Independent Power Producers’ Association Nepal (IPPAN), Nepal Insurers’ Association, and domestic reinsurance companies.

The session aimed to identify pressing issues, assess stakeholder concerns, and explore practical solutions to strengthen insurance coverage for hydropower projects. Topics included gaps in current practices, cost concerns, and the need for sustainable risk management strategies.

The NIA director, Susildev Subedhi, emphasized the commitment to improving the sector’s insurance framework, including the potential development of a dedicated hydropower insurance policy, increased insurance awareness, and stronger internal mechanisms to handle sector-specific risks. Stakeholders from IPPAN advocated for the removal of the fixed-rate system, suggesting that premium rates should be determined by market dynamics in line with an open economy.

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Reinsurance representatives highlighted the sector’s high-risk nature, noting that international reinsurers have shown reluctance to underwrite hydropower projects in Nepal. Domestic reinsurers have also faced capacity limitations.

Participants emphasized that without adequate premium adjustments, the sector’s ability to secure reinsurance could be compromised. Several attendees supported the creation of a sector-specific insurance pool involving all relevant parties to share and manage risks more effectively.

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