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The Hindu Kush Himalaya region in Nepal is considered hydrologically vulnerable and fragile, and is likely to face adverse impacts due to climate change. Many rivers originate in this region, which are the lifeline for the millions of riparian people. The Marsyangdi river basin is the hub of hydroelectric power generation. The main objective of this study is to assess the impact of climate change in water availability by using the Soil and Water Assessment Tool (SWAT) model. Future climate projections were derived from three regional climate models (RCMs), namely ACCESS1‐CCAM (ACCESS) CNRM‐CM5‐CCAM (CNRM), and MPI‐ESM‐LR‐CSIRO‐CCAM under two representative concentration pathways, RCP 4.5 and RCP 8.5. These projections were bias‐corrected against the observed historical data, and simulation of impact was assessed using the SWAT model. This study reveals an increase in maximum temperature by 1.4°C by the 2040s (2031–50) and 2.6°C by the 2070s (2061–80) and in minimum temperature by 1.8 and 2.9°C by the 2040s and 2070s, respectively. The future projected rainfall shows a declining trend in all the models. The maximum increase in annual rainfall in the CNRM model is about 31.1% for RCP 8.5 during the 2040s and the MPI RCP 8.5 model show a minimum reduction of about 19.6% in the 2070s. In all three models the average annual rainfall is expected to increase by 10.2 and 10.7% by the 2040s and 2070s respectively. The reduction in streamflow in 2031–2050 is maximally about 19% in the CNRM RCP 8.5 and minimally about 6.3% in the MPI RCP 8.5. For the period 2061–2080, the CNRM RCP 8.5 shows a maximum decrease in streamflow of about 18.9% and the MPI RCP 8.5 shows a minimum reduction in streamflow of about 2.6%. This study will give significant insight to the planners for sustainable and integrated management of water resources and for the operation and design of hydropower projects in the basin. [ABSTRACT FROM AUTHOR]