Energising Development (EnDev) Nepal

Project description

Title: Energising Development (EnDev) Nepal
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ) within the scope of the EnDev energy partnership financed by Germany, the Netherlands, Norway, Australia, the United Kingdom, Switzerland and Sweden
Country: Nepal
Lead executing agency: Ministry of Energy
Overall term: 2009 to 2018

Context
Only 76 per cent of Nepalese people have access to electricity despite the country’s huge hydropower potential. Moreover, there is a significant urban-rural disparity, with about 94 per cent of city dwellers benefiting from a connection compared to just 61 per cent of the rural population. People in rural areas still rely heavily on traditional sources of energy, and many use kerosene lamps and candles for lighting. The shortfalls in the power supply also curtail opportunities for education and quality health care, as well as access to information and the potential for income generation.

Objective
More than 250,000 people, about 1,000 micro, small and medium-sized enterprises (MSMEs) and more than 30 social institutions have access to sustainable, modern energy services for lighting or other electrical appliances. In addition, around 148,000 people have access to better cooking technology. To realise their projects, Nepalese developers of micro hydropower have access to credit from local private banks.

Approach

This project is part of Energising Development (EnDev), a global, multi-donor energy partnership which aims to provide 20 million people worldwide with access to sustainable energy services by 2019. The Energising Development Partnership (EnDev) is a results-oriented global programme financed by Germany, the Netherlands, Norway, Australia, the United Kingdom, Switzerland, and Sweden. The respective governmental institutions are the German Federal Ministry for Economic Cooperation and Development (BMZ), the Directorate-General for International Cooperation of the Dutch Ministry of Foreign Affairs (DGIS), the Norwegian Ministry of Foreign Affairs (MFA), the Australian Department of Foreign Affairs and Trade (DFAT), the UK Department for International Development (DFID), the Swiss Agency for Development and Cooperation (SDC), and the Swedish International Development Cooperation Agency (SIDA).

EnDev Nepal supports access to modern energy services through grid-based electrification, while promoting the financing of micro hydropower projects and the productive use of electricity. Grid-based electrification contributes to the Ministry of Energy’s community-based rural electrification programme, which is operated by the national utility, Nepal Electricity Authority (NEA). The communities act as bulk customers of NEA. They are responsible for running the local distribution network, and they also manage the billing system, both to NEA and to individual consumers. EnDev provides financial and technical assistance to these communities. It also supports the productive use of electricity at the local level in order to stabilise the financing model for the communities and promote business opportunities. To this end, the project cooperates with HELVETAS Swiss Intercooperation, as well the local umbrella organisation for the community electrification entities.

Working with the Alternative Energy Promotion Centre of the Government of Nepal, EnDev facilitates access to loans for developers of micro hydropower facilities, using a micro hydro debt fund operated by two local private banks. This allows the developers to secure the necessary financing for their projects.

A new area of activity is the electrification of traditional, mechanical water mills, primarily in extremely remote villages. In this measure, EnDev cooperates with the Dutch non-governmental organisation SNV.

With the help of a results-based financing mechanism, the project supports efforts to encourage the wider uptake of improved cookstoves, some of which are also installed with smoke hoods. The cooperation partner for this is Practical Action Nepal. Producers receive training, and market development plans are created for each project district. Technicians receive a subsidy for each successfully installed stove. In earthquake-prone areas, the project has also put the distribution of portable improved cookstoves on the agenda.

Results

To date, more than 199,000 residents in 46 communities have acquired a connection to the national grid. As 500 social institutions and more than 1,900 MSMEs have also been connected, the project has already far exceeded its set objectives. This is primarily due to the scaling up of the related awareness-raising campaigns. The earthquake in 2015 had a major impact on efforts to distribute energy-efficient improved cookstoves. Around 1,100 people have been reached so far.

Electrification has helped to create additional income-generating opportunities, in the form of rice mills, timber processing plants and poultry farms. Some 15 business service providers have received training and now offer services and advice on the commercial use of electricity. Meanwhile, EnDev’s capacity building activities have improved the level of understanding in community organisations regarding the productive uses of electricity. These organisations have also shown a willingness to provide business incentive packages with subsidised tariffs.

The developers of 27 micro hydropower plants have so far benefited from financial support through the micro hydro debt fund of the two commercial banks. Following the severe earthquake of April 2015, 12 of these plants were in operation by the end of 2015, and four others were set to reopen.

Contact

Jaime Sologuren
jaime.sologuren@giz.de