Water and Environment: This is a study of the benefit sharing of hydropower projects of Nepal in socioeconomic transformation of local stakeholders. It is the study of hydropower projects listed in the capital market (Nepse Index) in Nepal and its impacts and contributions to the local people of the projects area. To find out the status of Socioeconomic Transformation of local people in hydropower project area before and after the construction, to find out the relationship between hydropower project management and local community development in socioeconomic transformation, and to analyze the pattern of benefit sharing of Nepalese Hydropower projects in socioeconomic transformation of local community; the study was done. To promote the sustainable performance of the hydropower project, develop tools covering all aspects of sustainability- environment, social, technical, financial and institutional with its global applicability. It identifies the five sustainability scoring measures for monitoring the strength and weakness of the project so that project developers may rectify their flaws to achieve all forms of goal effectively and sustainably. In spite of numerous theories being developed and the guidelines framed in the past decades to share benefits from developmental activities especially, now the time has come to test its practicalities at the ground level. The study attempts to bridge the research gap on the Benefit Sharing mechanism around hydropower projects of Nepal. Research Methodology is the study of research methods. From the inductive approach descriptive qualitative analysis of hydropower projects affiliated in Nepalese capital Market (Nepse Index) has been designed. Entire 37 projects are selected purposively. From the post positivism approach ontology and epistemology have been applied philosophically. It is a qualitative exploratory study of hydropower industry of Nepal. Questionnaire, focus group discussion, and key informant’s interview have been used as data collection tools. Both primary and secondary information are applied. The social, economic, political, environmental, and technical status of hydropower industry of Nepal are analyzed. The status is applicable for further discussion of Benefit Sharing Mechanism (BSM). It presents the detail description of selected 37 projects. Socioeconomic transformation is changes in income or financial status of people in social setting. Socioeconomic transformation of local people in hydropower project area before and after the construction of the specified projects have been analyzed. It further analyses the context of economic transformation, and economic transformation through share investment, employment, irrigation, water, and tariff process and management of hydropower projects. The relationship between hydropower project management and local community development in socioeconomic transformation is based on input-processing- output; a systematic mechanism. But there is a wide gap in system in Nepal. There are numbers of patterns of benefit sharing of Nepalese hydropower projects in socioeconomic transformation of local community, but in Nepal we do not have specified one pattern however its core common values are in practice. In conclusion, Nepalese hydropower industry is still in premature condition. Only 37 companies are listed in NEPSE Index (Nepali Capital Market). Their impacts in community development through benefit sharing mechanism and other development initiatives the economic transformation have been three time higher than before. It is satisfactory but the balanced development in entire provinces are necessary. The status of socioeconomic transformation of local people in hydropower project area before and after the construction found three times better than before. The relationship between a hydropower project management and local community development in economic transformation is improving gradually as per the global development and local public awareness. Both the parties are united as a family for better benefits through the desire of increasing rate of bonus and benefits from capital market. The pattern of benefit sharing of Nepalese Hydropower projects in socioeconomic transformation of local community is diverse. Different projects have different pattern but almost all of them are agree on specified social, economic, political, environmental, and technical dimensions with 25 indicators.