My grandpa doesn't like the taste that thickening powder leaves so he won't drink much. He needs nectar consistency. Any suggestions?

I used Thick It and never had a problem with my Husband refusing to eat or drink anything.
How about pureeing fruits for him to drink. Some are more dense so they would not need to be thickened. If you process a blend you might get the right consistency. It would be like a smoothie. You can thin it down with a fruit juice if it becomes thicker than he needs.
Avoid giving things that will melt to a watery consistency though. Ice cream, popsicles, even yogurt gets thin in your mouth all of these can be easily aspirated.
Because you are concerned about the sugar and his diabetes I would try different brands of thickeners. (contact his doctors office and ask if they have samples of different ones, or ask at the pharmacy)
Also do not think only of fluids to help hydrate. There are lots of foods that can be given that will help. meals can be soups, stews, hot breakfast cereals like oatmeal, cream of wheat, even polenta, rice pudding can help.
There are also protein drinks that are formulated for diabetics that are a bit thicker than drinking water, juice or milk.

You might find this helpful

https://www.dysphagia-diet.com/Images/ThickenerComparison_2013.pdf

Daddy lived on popsicles the last month of his life. No problem with sugar, he was not diabetic, but he did get hydrated (to a degree) with 4-6 popsicles a day. He knew he wouldn't choke on them, that's why he liked them.

Just an FYI - If he is in danger of aspirating thin fluids I'd be very cautious trying anything like popsicles, they will melt into a thin liquid in his mouth and cause a choking hazard.

Somewhere I've got a lovely brightly-coloured chart about "what contributes to my fluid intake" - can't lay my hands on it, but don't forget that as well as drinks, as in drinks as such, lots of other things count. E.g.

Ice cream
Jello
Soup
Fruit such as watermelon
Milk puddings like rice pudding, semolina etc.

If he likes the taste of yoghurt, you could try offering lassi, a yoghurt drink that doesn't have to be sweetened.

Is the swallowing impairment the result of a recent stroke?

I suggest you use apple sauce. ( no sugar of course)

The thickener gels work better than the powder ones in my experience. Resource has thicken-up clear, it is more expensive but dissolves much easier in all thin liquids including ice cream and soda which usually is impossible to thicken with the powder.

What kind are you using, I thought it was pretty much tasteless although the thickened texture can take getting used to. My go to was ThickenUp clear (made with xanthan gum) - that's what they used at mom's nursing home too.

Bone broth and meat stock might be good options, to increase his protein intake.

My Mom cannot stand the powder but she handles the gel type just fine.