Nepal, a country of renowned Himalayan beauty, is an epicenter of some of the most
notorious trekking routes. Hundreds of thousands of trekkers flock to Nepal every year,
ultimately providing a path of economic growth via tourism. This economic growth has given
the country an opportunity to improve the lifestyle of the Nepalese, specifically those in rural
areas. One aspect of life that has been targeted is in the field of renewable energy. The country
has no natural reserves of oil, gas or coal. Instead, energy is typically obtained from imported
fossil fuels or traditional resources such as firewood, crop residues, and animal dung.
Unfortunately, these can be either costly or unreliable. Fortunate for the people of Nepal, the
government has created policies in support of the implementation of rural energy projects that
have provided valuable results.

In 1996, the Nepalese government introduced the Alternative Energy Program Centre
(AEPC). The goal of this institution was to support renewable energy mini-grid development
through subsidies, technical assistance, and training in productive uses of energy; and that is
exactly what they have done. The AEPC is one of the first programs worldwide to successfully
scale up investment in mini-grids as part of a national rural electrification strategy.
The program has created an enabling environment for a wide range of mini-grid
projects. Since 1996, the AEPC has helped develop more than 2,000 hydropower mini-grids that
have in turn provided 30 MW of electricity to 1.5 million people. As of 2017, these hydro
powered mini-grids electrify about 9% of Nepal’s rural population. Altogether, the AEPC assists
in the installation of micro-hydro power plants, solar panels, biogas digesters and wind
turbines. As as result, of the roughly 60% rural population with electricity, 15% is via renewable

Electricity has reached over 300,000 households. Schools have been equipped with
computers, which has contributed to more attendance and a general higher quality of
education. Small businesses have emerged for purposes such as photocopying, electronic
repair, agricultural processing, and trekking hotels. In the Nepalese village of Duni, women had
to walk a full day to extract oil from mustard seeds. Electricity allowed a small agro-processing
mill to produce oil and process rice. Now these women have more time to do other jobs. This is
one example among many.

The benefits of the renewable energy implementations throughout Nepal persuaded
policy makers of the value of rural energy projects. Thus, resulting in an increase of financial
government support. The government maintains a goal of universal access to clean, reliable,
and affordable renewable energy solutions by 2030.

Naturally, the program encountered some issues. Originally, the subsidy program only
extended to community-owned mini grids. Since communities do not seek loans, but instead
rely on grants, many projects were delayed for many years while grants were sought from local
government or non-profit organizations. Under the original plan, in order to receive a subsidy,
the mini grid had to serve at least five households per KW generated. The goal was to provide
energy to as many households as possible. Thus, mini hydro systems capable of powering
businesses like hotels or agricultural processing plants did not make the cut for subsidies.
However, starting in 2017 the AEPC reevaluated the program so that now private developers
qualify for the subsidy program. These private developers have better access to credit from banks than a community developer would. As well, private developers use the energy for more productive purposes and thus retain more financial stability. Many of the community-owned mini grids receive minimal use for the purpose of saving money and maintaining equipment.

At the end of the day, the Nepalese government’s support and introduction of an
institution like the Alternative Energy Program Centre is admirable. In this day and age, the
recognition of the necessity for renewable energy is crucial. The AEPC has enabled Nepal to be
leaps and bounds ahead of other nations. Hopefully, their advancement in sustainable
development can be used as a model for countries aspiring to achieve similar goals.


Written by Willow Ritch


Categories: Uncategorized

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