Nepal is undergoing a historic energy transformation driven by its immense water resources, with installed hydropower capacity newly surpassing 4,296 Megawatts (MW). Accounting for over 90% of domestic electricity generation, hydropower has shifted from providing basic residential illumination to fueling nationwide economic modernization. This abundant clean energy is accelerating the adoption of electric mobility, driving industrial automation in manufacturing corridors, and replacing expensive imported fossil fuels with domestic induction cooking. Furthermore, Nepal has transformed from a net energy importer into an emerging regional exporter, daily supplying over 800 MW of clean surplus electricity to sub-regional grids in India and Bangladesh during the wet monsoon season. However, the sector faces structural vulnerabilities, including a 70% drop in generation during dry winters due to a heavy reliance on run-of-the-river plants, alongside severe climate risks such as landslides and Glacial Lake Outburst Floods (GLOFs). To secure long-term grid stability and monetize its 42,000 MW economically viable potential, Nepal is prioritizing a shift toward multi-purpose reservoir projects. Ultimately, hydropower serves as the foundational pillar for Nepal’s green economy, driving industrial growth, climate resilience, and regional energy security.