Nepal has significant potential for renewable energy, with 83,000 MW from hydro, 2,100 MW from solar, and 3,000 MW from wind. The government is pursuing various initiatives for clean energy financing, including subsidies and technical assistance, to support both on-grid and off-grid projects. Key challenges include unclear policies for renewables other than hydro, limited access to financing, and a growing demand for electricity amidst an annual growth rate of 10%.

1. Kushal Gurung
WindPower Nepal Pvt Ltd- CEO

2. Nepal’s Energy Consumption:2015
 16 GJ /per person
 128 kwh/per person
 65% access to grid
electricity

3. Clean Energy sources in Nepal
 Hydro: 83,000MW
 Solar: 2100MW (2% of land)
 Wind: 3000MW
 Bioenergy: Biogas, Improved cooking stoves
 Waste to Energy: Municipal Solid Waste

4. Rivers:
>6000
Hydropower potential:
83,000 MW
1st Hydro project:
500kW in 1911 AD
Installed capacity:
787 MW (≈ 1%)
Under construction:
~2000MW
Hydro

5. Solar
Solar irradiance:
 4.7 kwh/m2/day
Sunshine days:
 300
Total potential:
 2100MW (2% of land)
Installed On-grid:
 ~680kW
Installed Off-grid:
 ~40MW
Solar Applications:
 Solar cooker/ dryer
 Solar water heater
Solar street light

6. Wind
 1980s: NEA led10kw*2
units Kagbeni project,
failed
 >2010: AEPC led Off-
grid wind-solar hybrid
community projects (4-5
sites)
 Nepal wind resource
mapping (2015-2018)
 Next: On-grid wind?
 Potential: 3000MW

7. Bioenergy and Micro hydro
 Domestic biogas
 ~350,000 installed
 1,100,000 potential
 Improved cooking stoves
 ~1,000,000 installed
 2,500,000 potential
 Microhydro
 ~54.5MW installed
 100MW potential
 Improved watermill
 ~10,000 installed
 30,000 potential

8. Policies
 Endorsed Global initiatives by Nepal: SE4ALL; SDGs (No 7)
 NEA (Ministry of Energy): State Utility
 On-grid hydro: 35 year PPA; Tax breaks
 On-grid solar and wind: in-pipeline (no clear policy yet)
 AEPC (Ministry of Population and Environment): Subsidy
driven
 Biomass- Improved cooking system
 solar home system- Urban/Solar/Institutional
 Rural off-grid community electrification system
 Micro-hydro
 Wind-solar hybrid system
 Biogas- Residential/Community/Large scale/Commercial biogas
 Waste to Energy
 Investment Board of Nepal
 Single window approach for FDI on big energy projects

9. Financing in Clean Energy-
Government
Approach: Subsidy, Grant and Technical Assistance
 National Rural & Renewable Energy Programme
(AEPC)
 Single programme modality, from 2012-2017
 Budget: $170.1 million, including $40 million of TA
 Included energy sources: solar, biogas, biomass
 Renewable Energy for Rural Livelihood (AEPC)
 2014-2019, supported by UNDP & GEF, Budget: $5
million
 To develop 10 MW from mini and micro hydropower
plants, 2.5 MW of solar PV systems and establishment of
mini grids connecting Micro-Hydro Plants of 300 kW

10. Financing in Clean Energy-
Government
 Scaling Up Renewable Energy Program
(AEPC)
 Extended Biogas Project, 2014-2019
 World Bank funded, Budget: $ 7.1 million
 Target: support large scale off-grid biogas projects
for thermal application and electricity generation
 Grid Solar and Energy Efficiency Project (NEA)
 World Bank funded, 2014-2020, $138 million
 Grid-connected Solar PV Farms Development; and
Distribution System Planning and Loss Reduction
 NEA working on 25MW on-gird solar EPC tender

11. Financing in Clean Energy-
Government
 South Asia Sub-regional Economic
Cooperation project: Power System
Expansion (NEA/AEPC)
 Funded by ADB; 2014-2022
 ~$440 million as Loan, Grant and Technical
Assistance
 On-grid: executed by NEA; Off-grid: executed by
AEPC
 Off-grid plan: 4.3MW of mini hydro and up to 500
KW of mini-grid based solar or solar/wind hybrid
systems; $5 million loan, $10 million grant

12. Financing in Clean Energy-
Government
 Ministry of Federal Affairs and Local
Development
 Public Participation Based Solar Street Light
Programme, i.e. ministry, local bodies and users’
committees bear 60, 25 and 15 % respectively
 45,308 solar street lights within 2073/74 ; ~$10
million

13. Financing in Clean Energy- Non-
govt
 NGOs: Grant driven
 Rural applications- solar water pump, biogas,
improved cooking stoves
 WWF Hariyo Ban Program, Winrock, CRT/N, etc
 Private Sector
 Business model: most of them are Vendors and
EPCs
 Emerging model: Energy Service Company
(ESCOs)

14. Opportunities
 >30% population have no access to grid, i.e. 90
lakhs*100watt = 900MW off-grid opportunity
 On-grid: Peak demand is up to 1400MW, while
installed capacity is less than 900MW =500MW
 Growing demand for electricity: 10% annual
growth
 Nepal wants to become Developing Country by
2022 (Bangladesh’s per capita electricity
consumption is 258kwh), i.e. more electricity
needed
 Modernised Agriculture: solar water pump,

15. Bottle necks
 On-grid
 Unclear policy for renewables, other than hydro
 Off-grid
 Mostly subsidy driven- EPC model
 Size limit up to 100kW system (2073)
 Unclear policy for ESCO business
 Rural population have low electricity consumption
 Access to finance
 Unclear law for innovative financing instruments-
crowdfunding
 Project financing at promoters’ risks
 Bureaucratic hurdles in channelling FDI

16. Way Forward
 More pilot projects esp for on-grid
 Conducive renewable energy policies
 Net metering, Feed-in-Tarrif
 Attractive financial schemes and tax breaks
 Accelerated Depreciation Tax
 Production Tax Credits
 Push for local manufacturing
 Conducive policies for FDI

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