Planning and Policy Requirements from Pilot Projects: Nepal

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1 Planning and Policy Requirements from Pilot Projects: Nepal Regional Training Workshop on Widening Access to Energy Services through Pro-Poor Public-Private Partnerships17-22 July 2011 UNESCAP, Bangkok, Thailand September 2013 Mr. Surya Kumar Sapkota Assistant Director, AEPC Mr. Hari Prasad Ghimire Under Secretary, MoSTE, Nepal

2 Introduction & Energy Situation in Nepal Landlocked Himalayan country with diverse climate situation Per capita income US$ 717 and 4.5% GDP growth rate 85% population live in rural areas (total 26.6 million) and agriculture main occupation Total energy consumption Million TOE (2012) & per capita energy consumption is 16 GJ Commercial Energy 14% Traditional Energy 85% Agricultural residues 4% Renewable Energy 1% Sources of Energy (2012) Livestock residues 7% 76% population have access to electricity including 12% from RETs Fuel wood 89% Traditional Sources of Energy (2012)

3 Renewable Energy Situation of Nepal Micro-hydro (Potential >100MW & Progress ~ 23 MW HHs Biogas (Potential 1.1 million & Progress ~0.28 million plants) Wind (Potential 3000 MW & Progress-Pilot projects) IWM (Potential 25,000 & Progress ~7,000) ICS (Potential 2.5 Million & Progress ~0.7 Million hhs) Bio-fuel (Potential 1100,000 tons & Progress- piloting SHS (Potential 4.7 kwh/m2/day & Progress ~0.49 million hhs; 9 MW) Solar dryer & cooker (3000 HHs) Institutional Solar System/Solar water pumping (200, 000 HHs)

4 RE Policies Rural Energy Policy, 2006 Renewable Energy Subsidy Policy, 2013 RE Act including FIT (in the process) 20 Yrs RE Perspective Plan (in the process) 13 th National Development Plan

5 Key Highlights of Rural Energy Policy To reduce dependency on traditional energy and conserve environment by increasing access to clean and cost effective energy in the rural areas. To increase employment and productivity through the development of rural energy resources. To increase the living standards of the rural population by integrating rural energy with social and economic activities.

6 Key Highlights of Rural Energy Policy.. The capacity of the local bodies will be improved for rural energy planning, implementation, M & E at the local level and involvement of cooperatives, user groups, NGOs, private sector will be increased. Rural Energy Fund will be established at the central level to mobilise financial resources and fund will be expanded to the local level as per need. Emphasis will be given in the development of affordable and suitable rural energy resources. Private sector and NGOs will be involved in the rural energy development for development and expansion of new technologies.

7 Key Highlights of Rural Energy Policy.. Emphasise to increase private sector participation by motivating the involvement of private sector in manufacturing of equipments related to rural energy. Economic instruments will be used to mobilize the capital from banks and financial institutions, internal capital market, community capital for rural energy development. Encouragement of the local body, cooperatives, private sector, user organisation or community management to purchase and distribute electricity from electricity production. Special programmes of promotional activities will be implemented that emphasize on access to rural energy and role of rural energy in sustainable development, poverty reduction and positive impacts on women and children.

8 Key Highlights of Rural Energy Policy.. Poor and backward families will be identified and provided with additional support for use of rural energy system. The existing subsidy will be gradually reduced in accessible areas and areas where it is commercial viable. Community management and holistic approach will be encouraged as may be necessary for the sustainable rural energy development and management.

9 Some of the additional Policy Measures Promote the public private partnership for access to energy through Credit financing (soft loan) Premium for insurance Risk sharing, risk capital grant Promote holistic approach rather than project based approach Link with the income generation enterprise developmentproductive energy use Focus on increasing access by lowering the initial costs (technical advice, capital investment) rather than lowering the operating costs. National Renewable Energy Policy inc. FIT and Integrated RE Plan

10 Support from 5Ps for Policy influences Demonstration and replication of the clean energy projects Incentive to private sector to reduce risk of investment coupled with technical assistance Promote Private Entrepreneur as business entity for investment and operation fee for service Subsidy and credit should be linked not isolated Subsidy for productive energy use Building local capacity local skill and knowledge Implementation modality of the 5 Ps Capacity building of the FIs, LFIs, private sector Set up Revolving Fund for the credit financing CREFinnovative financing schemes

11 Thank You for Your Kind Attention For More information: