Nepal Renewable Energy Project to Reduce Greenhouse Gas Emissions

More than 142,000 households in Nepal will get long-awaited access to electricity thanks to the implementation of the Nepal Micro Hydro Project for which an emission reductions purchase agreement (ERPA) was signed on Friday, June 29. This is the second greenhouse gas emission reduction project in Nepal, executed by the Alternative Energy Promotion Centre (AEPC), under the Clean Development Mechanism (CDM) of the Kyoto Protocol.

This carbon offset project complements the ongoing World Bank Power Development Project to provide increased access to electricity for people living in rural areas. It is anticipated that by 2011, 15,000 kW will have been installed. . The generating capacity of these plants will vary from five to 500 kW. Micro-hydro plants are installed for local communities by pre-qualified private companies that receive subsidy and credit support as well as technical assistance. Most of the plants will be managed by the communities themselves.

“We are proud to be working once again with AEPC to help make this project happen,” said Ken Ohashi, the World Bank Country Director for Nepal. “The project is important for Nepal in terms of bringing power to the poor, but it’s also important for the world since it brings the global benefits of greenhouse gas reductions.”

Nepal has vast hydro resources. Until now, however, only about 600 MW of the 43,000 MW of economically viable hydro power potential have been developed. While 90% of Nepal’s urban population is connected to a power grid, only some 27% of rural households have access to electricity. The emission reductions project operates in the poorest and most geographically isolated areas and serves the most socially marginalized groups in rural Nepal.

The project developer, Alternative Energy Promotion Centre, Nepal (AEPC) will sell a total of 191,000 tons of carbon dioxide equivalent in emission reductions until 2012 to the Community Development Carbon Fund, managed by the World Bank. There is the possibility to increase the volume of certified emission reductions by at least an additional 100,000 tons.

“The Alternative Energy Promotion Centre has been promoting clean energy technologies throughout the country with significant contributions to sustainable development by reducing greenhouse gas emissions, said Dr. Govind Raj Pokharel, the Executive Director of AEPC. “The micro-hydro project is the second CDM project of the country ─ the first one was a biogas CDM project which was also executed by AEPC.”

Installation of micro-hydro plants will take place in a phased manner until 2011. These micro-hydro plants are being implemented through two AEPC- executed programs, the Rural Energy Development Programme supported by the World Bank and UNDP, and the Energy Sector Assistance Programme supported by the Governments of Denmark and Norway. Micro-hydro power plants will reduce greenhouse gas emissions by replacing diesel fuel used for lighting and milling.

The project provides a subsidy which covers approximately 35-55% of the total investment for a plant. In addition, the project also provides technical training, market information, and business development support services to the users – mostly households in rural Nepal, some of which have organized themselves into “communities” that own the micro-hydro plants and are responsible for their upkeep. Capacity building for private sector partners involved in surveying, designing, manufacturing, and installing micro-hydro plants are also included in the project.

Off-grid power generated by micro-hydro plants provides a large number of rural households with electricity for lighting, milling, and other needs. Such systems not only help in poverty alleviation but also have direct local environmental benefits by reducing diesel consumption and the use of dry cell batteries. Aside from environmental benefits, the micro-hydro plants also help promote different local electricity-based enterprises and create employment at the village level; they also help children’s education as well as adult education programs by providing quality lighting into the night, allowing increased hours of study. For more information please visit: www.carbonfinance.org

Source: World Bank
Photography: Md. Arafatul Islam

Category: ICT for Development, Knowledge for Development, Press Release