Water resources are important natural resources for the economic development of Nepal. Availability of abundant water resources and geo-physical features provide ample opportunities for hydropower production in Nepal. Out of the total hydropower generation capacity of about 83,000 megawatt (MW) in the country, about 42,000 MW of power generation appears feasible to date from financial–technical perspective.
In order supply easy and reliable electricity service through develop and extension of hydropower, the Government of Nepal has established Nalsing Gad Hydropower Development Committeefor development of Nalsing Gad Hydropower Project (Storage Project of 410 MW capacity).
Nalsing Gad Hydropower Development Committee has been established by Government of Nepal in year 15th Ashoj, 2069 (1st October, 2012) for development of Nalsing Gad Hydropower Project in Jajarkot district in Nalsyau Gad River a tributary of the Bheri River of the Karnali Basin.
Nalsing Gad Storage Project was indentified in 1999-2001 under "Identification and Feasibility Study of Storage Project'' (IFSSP) by Nepal Electricity Authority while identifying potential storage hydropower projects in the country for implementation to fulfill the increasing demand of peak power in the Integrate National Power System (INPS). This project conceived as one of the attractive project among the screened and ranked storage projects during (IFSSP-2001). The IFSSP project had identified a total of 93 potential storage projects. It has been one of the selected projects recommended for the further.