Nepal Floods Create Uncertainty for Korean Hydropower Project

The hydropower project in Nepal, which has seen an investment of approximately 900 billion won, is at a crossroads following the devastating floods in August. Korean companies are increasingly concerned about facing additional losses or lawsuits due to the complex financial and legal contracts surrounding the project. Experts suggest that the difficulties in recovery and ongoing flood risks necessitate serious discussions about withdrawing from the project.

According to data submitted by Kim Wi-sang, a member of the ruling People Power Party, the Nepalese government has not requested any changes to the completion timeline, construction schedule, or contract terms for the Upper Trishuli-1 hydropower project, which suffered damage from landslides and flooding.

Instead, the local business entity NWEDC, established by Korea's South East Power, notified the Nepalese government of force majeure in August and submitted a progress report in September. Force majeure refers to unforeseen events such as natural disasters or wars that prevent normal contract execution, exempting parties from liability and damage compensation.


One in three innovative products purchased with government procurement funds did not have their post-use reports submitted on time. This raises concerns about the lack of oversight in managing products bought with taxpayer money.

Data from Kim Sang-hoon, another member of the People Power Party, reveals that the submission rate for completion reports on innovative product pilot uses was 68.1% last year, down from 100% in both 2021 and 2022. The submission rate dropped to 97.6% in 2023 and 79.1% in 2024 before falling to 68.1% last year. As of August this year, the submission rate stood at 68.3%.

The pilot purchase program allows the procurement agency to buy innovative products and provide them to demand agencies for performance and quality verification. Demand agencies are required to submit completion reports within one month after the pilot use ends. The procurement agency evaluates the products based on these reports.

There has also been a significant increase in late submissions. The number of delayed reports rose from 11 in 2023 to 148 last year, a jump of approximately 13.5 times. Meanwhile, the number of reports required for submission remained relatively stable, with 466 in 2023, 464 in 2024, and 473 in 2025.


The Korean stock market continues to experience a downward trend, exacerbated by fears over the performance of global tech giants and a lack of support from individual, institutional, and foreign investors. Investor sentiment has sharply declined, with the KOSPI index dropping 15% and the KOSDAQ falling 11% over the past week. The market has seen six instances of trading halts due to rapid declines, increasing investor fatigue.

According to data from the Korea Exchange, foreign investors sold a net 11.2395 trillion won worth of stocks from October 12 to 16. During the same period, individual and institutional investors bought 4.3124 trillion won and 3.4183 trillion won, respectively, while other corporations were net buyers of 3.4761 trillion won. However, this buying pressure was insufficient to counter foreign selling, resulting in a 14.5% decline in the KOSPI compared to the previous week, while the KOSDAQ fell by 6.5%.


The global diesel supply crisis, triggered by the war in the Middle East and attacks on Russian oil facilities, is expected to continue into next year, deepening concerns for South Korea, a major diesel exporter. Although the U.S. has allowed imports of Russian diesel and postponed additional sanctions, analysts suggest these measures are insufficient to resolve the supply shortage. The government’s efforts to stabilize domestic supply by restricting oil product exports conflict with the refining industry’s desire to expand overseas sales.

According to reports from the White House and foreign media, President Donald Trump announced on October 16 that he would delay the implementation of the Graham Act through an executive order. The Graham Act imposes a 500% additional tariff on certain Russian products, including energy, and a 100% additional tariff on goods exported to the U.S. from the top five importing countries of Russian crude oil and natural gas, aiming to impact Russia's energy export revenues.