It is predicted that by the 2050s, the Koshi (Kosi) River basin, the largest Himalayan basin in Nepal, will be experiencing frequent and devastating flooding events and lower lean season flows due to climate change. This will threaten the livelihoods of millions of inhabitants. Development of water infrastructure has the potential to make water availability more consistent and secure. It could generate as much as 10,086 MW of economically feasible energy and irrigate approximately 500,000 ha of agricultural land. We argue that the challenges of water infrastructure development under climatic uncertainty can be overcome through systematic assessment of climatic and nonclimatic risks and responsive governance mechanisms that employ newer forms of stakeholder engagement and accountability, networks, partnerships and enhanced collaboration across sectors.