Paper presented in international workshop on "Financing Village Level Energy for Development in Asia Pacific" jointly organized by ADB, GVEP & FDC in Manila

1. AEPC
Alternative Energy Promotion Centre
International Workshop on
Making Renewable Energy Mainstream Supply to Rural Areas
Financing Village Level Energy for
Development in Asia Pacific
April 09-11, 2008: Manila, Philippines
Session 5: Friday, April 11 (9:00 – 10:30)
“Public and Private Partnerships”
Session Objective:
To define, through real examples, the benefits,
challenges, and opportunities of public and private
partnership arrangements to deliver energy access,
especially at the rural and peri-urban level
The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development
Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and
accepts no responsibility for any consequence of their use. Terminology used may not necessarily be consistent with ADB official terms.

2. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Promoting Renewable Energy
Technologies through Public
Private Partnership
Mr. Nawa Raj Dhakal
Training Officer, AEPC, Nepal
E-mail: nawa.dhakal@aepc.gov.np/
nrdhakal@yahoo.com

3. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Presentation outline
• Background: Nepal’s energy consumption pattern
• AEPC: Objectives & Scope
• Major AEPC programmes & Institutional set up
• Key approaches & strategies
• Programme implementation modality
• Physical progress & important achievements
• Benefits & Challenges
• Conclusion

4. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Background-1
Nepal • Location: Southern
slopes of the Himalayas
• Area: 147,181 sq.km.

5. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Background-2
• Geographical regions: Terai (plain land), Hills and
High Hills (Ranging 200m to 8,848m)
• Population: 26.43 million; No. of HHs: 4,253,220
• Rural/urban population distribution: 84/16
• Per capita income: USD 260
• Energy consumption
2005/06: 8478 TOE
• Major contribution from
Traditional sources

6. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Nepal’s Energy Consumption Pattern 2005/06
By Fuel Type
By Sector

7. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Alternative Energy Promotion Centre
• Established in 1996 under the MoEST by AEPDB
formation order
• National executing agency of programmes and
projects in renewable energy sector
• Overall Objective:
To popularise and promote the use of alternative/
renewable energy technology, to raise the living
standard of the rural people, to protect the
environment, and to develop the commercially
viable alternative energy industries in the country

8. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Scope of AEPC
• Micro/mini hydro & Improved Water Mills
• Solar energy (PV and thermal)
• Biogas
• Improved cooking stoves
• Wind energy
• Geothermal
• Other RETs (Bio-briquette,
Gasifiers, Biofuel etc.)

9. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Major Programmes under AEPC
SN Programmes Major Support Areas Donors
1. Energy Sector Micro/mini hydro, solar Danida,
Assistance energy, biomass energy, Norway
Programme institutional support
2. Rural Energy Micro/mini hydro, UNDP,
Development community mobilization, World Bank
Programme environment & sanitation
3. Renewable Energy Community/institutional EC
Project solar energy systems
4. Biogas Support Biogas DGIS-SNV,
Programme KfW
5. Improved Water Mill Improved water mills DGIS-SNV
Support Programme

10. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Institutional Set up for Service Delivery
MoF MoEST NPC
AEPC Program Steering
Committees (GoN,
Donors
Program/ Pvt. sector, donors,
Projects other partners)
Regional/Local outreach: Private Sector: Stakeholders:
Promotion, Capacity Manufact…, supply, Coordination,…
Build., Tech. Support etc. instal…, ASS Networking,
Users/Community

11. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Key Approaches and Strategies
• Sector Programme Support with
a long-term perspective
• Public Private Partnership with
focus on community/users
participation
• Demand Driven Services

12. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Programme Implementation Modality
Public
Private
Demand side Partnership Supply side
Public sector Private sector
Awareness & Manufacturing &
capacity building supply
Technical & financial Subsidy Sales &
assistance installation
Coordination & After sales services,
networking repair & maintenance
Quality assurance, Int. Quality control &
monitoring & evaluation monitoring
Users/ Beneficiary

13. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Public Sector Partners
• VDCs, DDCs, GOs, (I)NGOs, CBOs, cooperatives,
financial institutions and user groups/networks
• Local outreach (RRESC, LPO, DEES/U, SO & SC)
• Representation in AEPDB, programme steering
committees
• Relevant stakeholders (coordination & collaboration)
– MoU with Agriculture Development Bank Limited, National
Cooperative Federation Nepal, Poverty Alleviation Fund,
Association of District Development Committees Nepal, National
Association of VDCs Nepal, Centre for Technical Education and
Vocational Training, World Wildlife Fund, Practical Action Nepal,
Winrock International Nepal, and others.

14. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Focus on the Technical Supports
• Standards, guidelines, manuals and quality assurance
• Company qualification, grading
• Tax exemption, Subsidy and Credit mobilization
– Subsidy covers only 25-40% of the total cost; and rest is
users’/community contribution- kind or cash/credit
– Biogas credit fund in AEPC
• Technical supports through local outreach
– Awareness/ information dissemination; Survey, design; Training,
orientation, demonstration; Channeling subsidy and mobilizing
credit; Ensuring quality, monitoring and evaluation

15. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Major Private Sector Partners
• Qualified companies/firms working in RET sector
– 65 Biogas companies- NBPA;
– 46 Micro/mini hydro companies & firms- NMHDA;
– 38 Solar PV companies- SEMAN;
– >20 Solar thermal companies- ASTED
– >8 IWM manufacturing cum installation companies
– Metallic stove manufacturing companies
• Private sector represented in AEPDB, programme
steering committees, and task force
• Pvt. Companies deliver services at user’s end via
their branch/dealers/agents

16. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Physical Progress on RET in Nepal
SN Alternative Energy Unit Progress Number of HHs
Technologies benefited
Access to Electricity 6 % Population
1. Biogas Plants Number 184,000 184,000
2. Micro hydropower kW 10,347 103,470
3. Solar Home System Number 95,000 95,000
4. Solar Tuki Number 60,000 60,000
5. Solar Cooker/Dryer Number 2,500 2,500
6. Improved Cook Stoves Number 250,000 250,000
7. Improved Water Mill Number 3,552 106,560
Total 801,530

17. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Important Achievements
1. Rural Energy Policy 2006, RE Subsidy
Arrangement & Delivery Mechanism, 2006
2. Established Rural Energy Fund (Basket fund) &
Renewable Energy Test Station
3. Vibrant RET Sector with Quality assurance
4. Enhanced capacity of Pvt. companies, NGOs &
local institutions in RET sector
5. Donors supporting RET sector through AEPC
6. Revenue generation through CDM
7. Recognitions and awards for AEPC progs.

18. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Major Benefits
• Concerted/collaborative efforts & shared ownership
• RET services locally available at affordable cost
• Linking RET development/adoption with socio-
economic development
• Opportunity for employment generation and poverty
reduction
• Enhanced institutional confidence
• Efficient use of traditional biomass fuels

19. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Main Challenges
• Subsidy driven demand (?)
• Credit mobilization not yet at the expected level
• Business risk and shortage of working capital
• Geographical coverage (remote)
• Social coverage (pro-poor)
• Retention of skilled human resource
• Donor harmonization
• Synergy and consistency

20. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Conclusion
• PPP approach successful in providing RE services
for rural areas
• RE promotion generating ample employment
opportunities
• RE services contributing in poverty reduction and in
improving the quality of life
• RE sector moving towards commercialization

21. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Thank you for your
kind attention!

22. AEPC
Alternative Energy Promotion Centre
Making Renewable Energy Mainstream Supply to Rural Areas
Abbreviations
• AEPC- Alternative Energy Promotion Centre
• AEPDB- Alternative Energy Promotion Development Board
• ASS- After Sales Services
• ASTED- Association of Solar Thermal Energy Developers
• DDC- District Development Committee
• DEES/U- District Energy and Environment Section/ Unit
• LPO- Local Partner Organization
• MoEST- Ministry of Environment, Science and Technology
• MoF- Ministry of Finance
• NBPA- Nepal Biogas Promotion Association
• NMHDA- Nepal Micro Hydropower Development Association
• NPC- National Planning Commission
• RRESC- Regional Renewable Energy Service Centre
• SEMAN- Solar Electric Manufacturers Association Nepal
• SO- Support Organization
• VDC- Village Development Committee