Disasters Cause Billions in Losses Each Year, Weakening Economy and Infrastructure

Nepal, one of the countries most vulnerable to climate change, suffers property damage worth billions of rupees annually due to disaster-related incidents. Experts say these recurring losses are gradually weakening both the national economy and physical infrastructure.

With increasing impacts of climate change, incidents of floods, landslides, and inundation during the monsoon months have led to rising human, physical, and economic losses. As a result, key infrastructure such as highways, bridges, drinking water systems, electricity networks, and communication lines are frequently destroyed.

Heavy rainfall from October 3 to 5 this year also caused severe damage to national highways, bridges, and hydropower structures, along with human casualties. However, the government has yet to release a complete damage assessment.

According to preliminary data published on Sunday by the Ministry of Energy, Water Resources and Irrigation, river erosion alone caused damage worth around Rs 100 million. Similarly, the Independent Power Producers’ Association, Nepal (IPPAN), reported that floods and landslides affected the structures or access roads of 18 hydropower projects. Production from 13 operational projects with a combined capacity of 105.4 MW has been halted, while five under-construction projects with a total capacity of 93 MW have also sustained damage. Major national highways, including the BP and Araniko highways, have been blocked, disrupting transportation.

Earlier in July this year, floods in Tibet’s Lhende River had caused human casualties and halted around 240 MW of electricity generation in Nepal.

Senior economist Keshav Acharya said that the physical and economic losses caused by such recurring disasters have long-term impacts on the country’s economic growth rate. “Since much of the capital goes into repairing damaged infrastructure instead of building new ones, the economy suffers a major setback,” he said.

“These repeated incidents every year narrow the scope for long-term development and affect government revenue as well,” Acharya added. “Hence, the government must now focus on constructing infrastructure designed to withstand disasters.”

Last year, heavy rainfall and resulting floods and landslides from September 27 to 29 caused losses amounting to Rs 46.68 billion, according to the National Disaster Risk Reduction and Management Authority (NDRRMA). Of that, Rs 38.92 billion worth of damage occurred in physical infrastructure. Forty-one roads and highways were damaged, with an estimated Rs 27.98 billion required for repair and reconstruction. Damage to 26 hydropower projects amounted to Rs 30.18 billion.

Earlier, in July 2023, floods in eastern Nepal damaged 30 hydropower projects — 13 operational and 17 under construction — causing losses estimated at Rs 8.5 billion, according to IPPAN.

Similarly, in 2021, the Melamchi Water Supply Project — which was nearing completion — suffered massive damage after floods and landslides struck the Melamchi River. A report by the Asian Development Bank, a financial partner in the project, noted that heavy rainfall and the outburst of a glacial lake upstream triggered the flood. Further damage occurred when a landslide-blocked section of the river later burst, releasing additional debris and water into the project area.