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The report details a System Scale Planning (SSP) framework applied to Nepal's hydropower sector, specifically the Karnali Basin. Using a Multi-Objective Evolutionary Algorithm (MOEA) and integration with the SWITCH energy model, the methodology identifies 'pareto-optimal' portfolios of projects that balance installed capacity and cost against environmental and social metrics. Key findings demonstrate that strategic project selection can significantly reduce biodiversity and livelihood impacts for a given level of energy output, and that restricting development on mainstem rivers (Scenario K03) can achieve a favorable balance of low environmental impact and low system cost.

The report evaluates Nepal's future energy options, finding that while hydropower remains central, integrating wind, solar, and battery storage can enhance system flexibility and support river conservation. Using the SWITCH model, the study demonstrates that strategic conservation of rivers, such as the Karnali basin, can be achieved with minimal impact on overall system costs. It also highlights the risks of relying solely on hydropower, noting that such a strategy increases costs by 10.7% and requires significant overbuilding of capacity to meet dry-season demand. The analysis further indicates that imports from India are critical for affordability, as eliminating them would increase system costs by approximately 45%. Additionally, the report explores regional equity and export strategies, suggesting that a diversified energy mix can support social goals and potential profitability if export prices exceed 30 $/MWh.

The project aims to reduce climate-related disaster risks in Nepal's West Seti sub-river basin by implementing integrated sub-watershed adaptation and management plans (SWAMPs) and enhancing the resilience of large-scale infrastructure. It seeks USD 25 million from the Green Climate Fund to benefit approximately 494,116 people, with a total project cost of USD 40 million. Key activities include forest restoration, the installation of solar micro-grids and improved cook stoves, and the establishment of a performance-based climate resilience grants system for local governments.

The report finds that Nepal's hydropower sector is currently highly vulnerable to climate variability, particularly smaller run-of-river plants. While future annual energy generation is projected to be relatively robust, climate change is expected to increase hazards such as sediment loads, floods, and Glacial Lake Outburst Floods (GLOFs). The study recommends a shift toward a more balanced power mix with increased storage capacity and the adoption of 'low-regret' adaptation options, including improved hydro-meteorological monitoring and early warning systems.