Advisory services for energy efficiency

Project description

Title: Advisory services for energy efficiency in Nepal
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Nepal
Lead executing agency: Ministry of Energy
Overall term: 2018 to 2021


In Nepal, access to energy and modern energy services is inadequate, and energy utilisation is inefficient. At 87 per cent, biomass is the chief source of energy. Approximately 65 per cent of the population has access to electricity.

Power supply is hampered by power cuts lasting up to 16 hours a day. The situation cannot be expected to improve in the medium term given increasing demand for electricity coupled with delays in the construction of new hydropower stations and power transmission capacity. Disproportionately high losses occur during the transmission and distribution of electricity. Consumer tariffs do not cover costs and consequently do not offer adequate incentives to use electricity efficiently.

The shortage of power is increasingly forcing trade and industry to resort to producing their own by means of diesel generators, with the result that more and more fossil fuel has to be imported. About three million or two thirds of rural households still cook on traditional stoves or open hearths that burn biomass. These cooking sources are a significant factor contributing to health problems, deforestation and greenhouse gas emissions as they use fuel inefficiently and produce a great deal of flue gas.


The conditions for planning and implementing measures to achieve more efficient use of energy in Nepal are improved.


The project is active in three areas:

  1. The Nepalese Chamber of Industry and Commerce, downstream district-level chambers and the Town Development Fund are being supported in delivering energy efficiency services. Auditors advise energy-intensive industrial companies on ways of making their production processes more energy-efficient and economical. The consortium Integration-Adelphi-IP Consult is implementing the German contribution as a subcontractor.
  2. The project supports the development and introduction of national minimum quality standards for improved domestic and commercial biomass stoves. Although the priority is improved fuel efficiency, the standards will also cover the stoves’ pollutant emissions and safety.
  3. The Ministry of Energy is supported in introducing a national strategy for efficient use of energy, including biomass. There are also plans to create a central Nepalese energy efficiency institution.


  • The subject of energy efficiency has been incorporated into the draft national energy strategy.
  • The biomass energy strategy has been presented to the two relevant ministries for energy and environment for submission to the cabinet. The draft energy efficiency strategy has been drawn up.
  • The Nepalese cabinet has adopted a decision that allows power from combined heat and power plants generated by the sugar industry to be fed into the grid.
  • The state test laboratory for biomass cooking stoves has been established, new improved types of stoves have been introduced and the first reference values for national minimum quality requirements have been elaborated.
  • Chambers of industry and commerce are offering energy efficiency services. 65 energy auditors have been trained according to certified standards. Energy audits have been performed in 50 particularly energy-intensive companies and in more than 100 small and medium-sized enterprises.
  • An energy information system has been set up. Banks are willing to finance energy efficiency measures undertaken by industry.

Further information