Nepal’s immense hydropower potential has long been touted as a path to economic growth, yet the country has struggled for decades with power shortages and dependence on electricity imports from India. This report examines the complex web of factors that have hindered Nepal’s ability to harness its hydropower resources, including the legacy of armed insurgency, misaligned financing, and India’s influence over Nepal’s water resources. Delving into the evolution of Nepal’s electricity sector and the roles of various stakeholders, the report presents a nuanced analysis of the multifaceted challenges facing the industry. As solutions remain unclear, the report offers thoughtful insights on how Nepal might chart a way forward to realize its hydropower ambitions and enhance energy security.