Renewable Energy for Rural Areas (RERA) Programme
Title: Renewable Energy for Rural Areas (RERA) Programme
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing agency: Alternative Energy Promotion Centre (AEPC)
Overall term: 2016 to 2021
Nepal’s mountainous topography makes it difficult and expensive to connect all rural areas to the electricity network. Therefore, the Nepali Government is supporting the deployment of decentralised renewable energy technologies (RETs) like mini-grids, solar home systems and biogas in rural areas. The Alternative Energy Promotion Centre (AEPC) is the government’s nodal agency for scaling-up decentralised renewable energy (RE). The promotion of decentralised RE builds strongly on subsidies and has largely been unable to establish sustainable markets for these technologies. Lack of involvement of local authorities and end-users in RE planning, unfavourable conditions for private sector investment, insufficient supply relations between technology providers and end-users, lack of access to finance, and inadequate after-sale-services are some of the reasons that lead to the absence of sustainable markets.
With the implementation of the new Constitution, provincial and local governments are now empowered to design policies and support-programmes, and deliver public goods and services in regard to decentralised RE. In this context, AEPC is transitioning from an implementing agency that provides services like subsidies directly, to a support agency that enables provincial and local governments to promote and implement RETs.
Local, provincial and federal governments promote Renewable Energy Technologies efficiently and more people have access to energy in rural areas of Nepal.
The state restructuring calls for new ways of government service delivery or promoting RE in a federalised context. To support the different levels of governments in developing these new approaches, to improve the conditions for market-development and to enable stakeholders to deliver (better) energy services to rural households.
The Renewable Energy for Rural Areas (RERA) programme adapts the following multi-level approach with a geographical focus on Provinces 1 and 7:
- Facilitating the Transformation of AEPC: The RERA programme is supporting AEPC in transforming from an implementing agency to a support agency in order to adapt to the requirements of the federalised state. RERA works together with AEPC to develop a portfolio of services that will help provincial and local governments to plan, promote and implement decentralised RE. Amongst others, these services include energy planning tools, model policies and regulations.
- Capacitating Provincial and Local Governments: RERA has supported AEPC in setting up two Programme Implementation Units (PIU) in Provinces 1 and 7. The PIU are instrumental in delivering capacity building and organisational development to the provincial and local governments, as well as their administrative authorities. Thereby RERA will enable the provincial and local level to institutionalise RE in the new government structure and include it in their service portfolio, as well as develop effective support-programmes to scale-up RE.
- Developing Sustainable Markets: RERA is working with the private sector, civil society and banking institutions to improve the supply of RE services and products as well as to ensure the after-sale-services. Additionally, the programme is working to create markets for off-grid energy technologies and services by supporting the government of Nepal in creating a conducive policy framework, (2) strengthening the private sector with innovative business models and technologies, and (3) improving the access to finance for businesses and end-users to purchase and market energy products and services.
- Empowering Women and Disadvantaged Groups (DAGs): RERA empowers women and marginalised groups by ensuring their involvement in local-level planning and decision-making processes for promoting RE. Furthermore, the programme is working together with municipalities, provinces, AEPC and energy enterprises to safeguard that women and DAG are equally benefitting from RETs.
The transition from a centralised to a federalised system provides many opportunities. Allowing local governments to provide energy services can increase accountability, make development more demand driven, inclusive and bottom-up.
By delivering the following expected results, RERA is supporting Nepal to realise the following opportunities:
- A framework for participatory and demand-led promotion of decentralised RE is developed and used by all three levels of government.
- Provincial and local governments are enabled to promote decentralised RE effectively. More people have access to modern and high-quality energy services.
- Local markets for energy services and products are strengthened, and the private sector expands its activities.
- Women and DAG are involved in planning and decision-making processes for government energy programmes and are equally benefitting from the energy services.