December, 2017 ANNUAL PROGRESS REPORT

PROJECT PROFILE

About the Project Geographic coverage of the project Project Title: Renewable Energy for Rural National level coverage (Yes/No): Yes Livelihood Number of Regions covered: NA

Number of Districts Covered: NA Award ID: 76958 Number of Municipalities Covered: NA

Number of VDCs Covered: NA Web link: www.aepc.gov.np Strategic Results UNDP Strategic Plan Outcome: Growth & development are inclusive and sustainable, incorporating productive capacities that create employment and livelihoods for the poor and excluded UNDP Strategic Plan Output: Inclusive and sustainable solutions adopted to achieve increased energy efficiency and universal modern energy access (especially off-grid sources of renewable energy) UNDAF Outcome 2: Vulnerable groups have improved access to economic opportunities and adequate social protection UNDAF/CPAP Output 2.4: Vulnerable groups have increased access to sustainable productive assets and environmental services

UNDP Output 2.4.1. AEPC's capacity enhanced for scaling up energy services in the rural areas Project Duration Implementing Partner(s) Implementation (day/month/year) Modality Start Date: 21 July 2014 1. Ministry of Population and National Environment, Government of Implementation 2. Alternative Energy Promotion Modality (NIM) End Date: 30 June 2019 Centre (AEPC) Project Budget (USD) UNDP Contribution: USD 2,000,000 Government Contribution: USD 30,312,500 Other Contributions: USD 24,249,600 Donor Contributions: Donor 1: USD 3,000,000 (GEF) Donor 2: USD 378,000 (Norwegian) Donor 3: USD 99,269 (Korean) Unfunded: USD 244,930 Total Project Budget: USD 35,312,500 (NPR 3,813,750,000) Total Project Expenditure till 2017: USD 1,296,529 Budget 2017: USD 1,321,520 Expenditure 2017 (GEF & UNDP only): USD 1,276,596 Budget Utilization % (2017) 97%

Name: Satish Gautam Name: Ram Prasad Dhital Project Manager Executive- Project Board Date: Date: December, 2017 ANNUAL PROGRESS REPORT

TABLE OF CONTENT

CONTENT PAGE NO Abbreviation 3 List of Tables 4 1. EXECUTIVE SUMMARY 5 2. BACKGROUND AND RATIONALE 6 3. PROJECT SUMMARY AND OBJECTIVES 6 4. PROGRAMMATIC REVISIONS 8 5. NARRATIVES ON KEY RESULTS ACHIEVED IN 2016 8 5.1 Progress toward the UNDAF/ CPAP Outcomes 13 5.2 Progress on Project Outputs 25 6. BUDGET AND EXPENDITURE 44 7. CROSS CUTTING ISSUES 45 7.1 Targeting and Voice/Participation of target groups 45 7.2 Gender equality, Women’s empowerment and Social Inclusion 45 7.3 National Capacity Development 46 7.4 Sustainability 46 7.5 South- South and Triangular cooperation 47 7.6 Partnership 47 7.7 Promotion of civic engagement 48 7.8 Expanding Opportunities for Youth 48 7.9 Innovation 48 7.10 Knowledge Management and Products 49 8. LESSON LEARNED 49 9. IMPLEMENTATION ISSUES AND CHALLENGES 50 10. PRIORITIES FOR 2018 51 11. A SPECIFIC STORY 52 12. ISSUES AND RISK LOGS 53 13. PROGRESS AGAINST ANNUAL WORKPLAN 57 14. ANNEX 66

• Annex 1: List of Micro Hydro Installed in 2017

• Annex 2: List of ISPV in 2017 under Relief and Rehabilitation

• Annex 3: List of Installed Solar PV in 2017

• Annex 4: List of Photo Voltaic Pumping System Installed in 2017 • Annex 5: Photo Gallery

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ABBREVIATION

AEPC : Alternative Energy Promotion Centre BFI : Banking and Financial Institutions BoA : Business Opportunities Assessment CAA : Country Action Agenda CREF : Central Renewable Energy Fund CoP : Conference of Parties DDC : District Development Committee DEECCS : District Energy Environment Climate Change Section DEMP : District Eletrification Master Plan DFS : Detailed Feasibility Study NRREP : National Renewable Rural Energy Programme SHS : Solar Home System SPV : Special Purpose Vehicle PPP : Public Private Partnership UNDP : United Nations Development Programme GEF : Global Environmental Facility GESI : Gender Equality and Social Inclusion GIS : Geographic Information System ICS : Improved Cooking Stoves IGA : Income Generating Activities ISPV : Institutional Solar Photo Voltaic IP : Investment Prospectus kW : Kilowatt MEP : Municipal Energy Plan MHP : Micro Hydro Power MSME : Micro, Small & Medium Enterprises MQAU : Monitoring and Quality Assurance Unit MW Megawatt NEA : National Electricity Authority NPC : National Planning Commission PEUC : Productive Energy Use Component PPA : Power Purchase Agreement POV : Power Output Verification PV : Photo Voltaic RERL : Renewable Energy for Rural Livelihood RET : Renewable Energy Technology SASEC : South Asia Sub-regional Economic Cooperation SDG : Sustainable Development Goal SEforALL : Sustainable Energy for ALL SPV : Special Purpose Vehicle UNDAF : United Nations Development Assistance Framework UNESCAP : United Nations Economic and Social Commission for Asia and the Pacific VDC : Village Development Committee WB : The World Bank

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LIST OF TABLES

TABLE NO. TITLE PAGE NO Table 1: Outcome and Output Statements 11 Table 2: Progress towards the UNDAF/CPAP Outcomes 13

Table 3: List of Mini Hydro Projects under construction 18

Table 4: List of Mini Hydro Projects online 18 Table 5: List of Solar PV Systems 20

Table 6: RE Systems supported by AEPC and RERL under relief and rehabilitation 21

Table 7: Progress on Output Indicators 25

Table 8: Output wise annual budget and corresponding expenditure 44

Table 9: Sources of funds Budget and Utilization of the project period 44 Table 10: M&E Expenditure: In 2016, Project spend on M&E activities 45

Table 11: Risk Log Matrix 53 Table 12: Issue Log Matrix 56 Table 11: Progress Against Annual Work Plan 2017 57

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1. EXECUTIVE SUMMARY

Renewable Energy for Rural Livelihood (RERL) is supporting Alternative Energy Promotion Center (AEPC) to remove barriers for scaling up renewable energy systems such as mini hydro, large micro hydro and large solar photovoltaic systems (PV). RERL was developed as an integral part of AEPC’s umbrella programme, the National Rural Renewable Energy Programme (NRREP), with the aim to address gaps in NRREP relevant to promoting mini-hydro and large-scale solar PV projects.

RERL through its well-designed interventions has been successful in formulating policy instruments, developing demonstration projects, introducing innovative ways of engaging private sector and fostering public private partnership. The cumulative impact of these activities have resulted in electricity access to 17,590 households, rehabilitation of 5,995 micro hydropower plants damaged during the 2015 earthquake, and support to AEPC for the installation of 11,695 micro hydropower plants.

In the changed federal context, RERL provided critical support to define the role and responsibilities of local government, which are clearly defined in the recently promulgated Local Government Operations Act 2017. Building on the Act, RERL is currently working with 2 municipalities to prepare their integrated Municipal Energy Plans (MEP), helping them identify their energy priorities to be consequently planned and budgeted in periodic plans. In addition, RERL has extensively helped AEPC to re-align its roles, responsibilities and mandates in the changed federal context.

RERL has supported AEPC and Nepal Electricity Authority (NEA) to develop and adopt technical standards for grid connection of Micro Hydro Power (MHP) and solar PV systems. Based on agreed technical standards, NEA has signed Power Purchase Agreements (PPA) of two micro hydropower plants for grid connection. In the same context, with RERL’s technical assistance, the 23kW Syaurebhumi MHP in Nuwakot successfully synchronized with the national electricity grid, the first grid interconnection of a MHP of less than 100kW and an unprecedented example of micro hydropower plants contributing to rural electrification and boosting rural income generating capacities. Similarly, the grid interconnection of Leguwa Khola MHP in Dhankuta is on-going. RERL also provided technical and financial assistance to Surya Power Company to connect its 1000kW solar PV system to the grid. Furthermore, RERL also prepared guidelines and modalities involving private companies in mini hydro development through Public Private Partnership.

In order to demonstrate financial and technical viability of larger RE systems, RERL supported AEPC and the ADB-supported South Asia Sub-regional Economic Cooperation (SASEC) project to promote large micro hydro, mini hydro, micro hydro interconnected mini grid and large solar systems. In 2017, RERL and SASEC initiated the construction of 2 mini hydropower projects with a total capacity of 0.4 MW that will benefit more than 4,500 rural households.

RERL provided technical and financial assistance to install a solar PV back-up system at the Snake Bite Treatment Centers in Nepal Army Barracks at Letang (Morang), Itahari (Sunsari) and Chariali (Jhapa). The 1.5 kW individual systems provide electricity to ensure undisrupted power supply for refrigerators storing life-saving snake venom vaccines that need to be stored between 2˚ and 8˚C, along with power fans, lights and nebulizers.

RERL is also assisting AEPC for commercial operation of MHP in different parts of the country. In Dolakha and Baglung districts, RERL is assisting communities to form cooperatives for sustainable operation and management of their rehabilitated MHPs. Likewise, the 83 kW Darna MHP in is also being supported for commercial operation. The innovative idea is to orient the communities to take their MHP as a profit-making asset and to improve revenue generation. For increasing the revenue of the MHPs, RERL has been working closely with the Productive Energy Use Component of AEPC to promote micro and small enterprises utilizing available electricity. So far, 1,182 enterprises have been established with AEPC subsidy, 5 | Page

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318 of which received direct technical support from RERL. To ensure that women and men from marginalized groups benefit from access to electricity, AEPC has provided an additional subsidy to establish enterprises.

RERL has been focusing on enhancing capacities and skills of various stakeholders in the RE sector, primarily system designers, fabricators, installers and operators. As the service providers are mainly from the private sectors, their capacity building has actively pursued by AEPC and RERL through classroom and hands on training, orientation and study tours. In 2017, RERL provided Micro Hydro Operators’ Trainings for 51 operators locally. Decentralizing training programs has drastically reduced the cost of travel and accommodation while also ensuring more hands-on training and Peer-to-Peer (P2P) learning. Similarly, 51 women entrepreneurs from Eastern and Mid-Western Regions were provided training to impart knowledge on business management particularly on entrepreneurship, book keeping and marketing of their businesses.

2. BACKGROUND AND RATIONALE

Over 85% of the population of Nepal has access to electricity. However, in rural areas, it is only 60%. Most of the households in the country receive electricity from the national grid and about 15% from off-grid renewable energy sources such as Pico Hydro (<10kW), Micro Hydro (10 to 100kW) and Solar Home Systems (SHS). Though there is a huge potential for Mini Hydro (> 100kW), very few projects have been developed in the country in recent years due to technical and operational challenges. In areas without sufficient hydro resources, larger solar PV systems would provide much more potential for economic growth compared to SHS.

The Government of Nepal (GoN) envisages providing clean cooking and lighting solutions to all by 2030, which is also a Sustainable Development Goal (SDG 7) and Sustainable Energy for All (SEforAll) target. The goal expected to achieve with both on grid and off grid solutions. GEF-UNDP RERL has been providing technical support to AEPC to promote mini/micro hydro and large Solar PV Systems apart from the promotion of mini grid, productive energy uses and establishing a mechanism for project development under a Public Private Partnership (PPP) modality.

3. PROJECT SUMMARY AND OBJECTIVES

The Renewable Energy for Rural Livelihood (RERL) project is funded by Global Environmental Facility (GEF) and the United Nations Development Programme (UNDP). RERL has been developed as an integral part of Alternative Energy Promotion Centre (AEPC)’s National Rural and Renewable Energy Programme (NRREP) and thus, has been assisting in fulfilling its ambitious targets. AEPC and donors have adopted a single programme framework. Thus, the NRREP represents the collective baseline activities in the country on renewable energy. The specific Renewable Energy (RE) related components of that programme, particularly on Mini/Micro Hydro and large solar PV systems are included in the GEF-UNDP RERL project baseline activities.

The main objective of RERL is to support AEPC to remove barriers for scaling up intervention that promote lesser disseminated larger renewable energy systems such as mini hydro, large micro hydro and large solar PV systems. RERL has been supporting the development of sustainable implementation modalities such as demonstration projects, private sector involvement for financing and attainment of financial sustainability through promotion of productive energy uses.

RERL has been providing technical assistance to develop mini/micro hydropower projects with the total installed capacity of 10 MW and Large Solar PV Systems of 2.5 MW. Among this, RERL has directly supported beneficiaries to develop 1 MW of mini hydro and 0.5 MW of solar PV as demonstration projects.

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Theory of Change

Nepal has made significant achievements in developing isolated micro hydro (less than 100 kW with average capacity of 30 kW) and solar home systems. About 15% of the country’s population get their electricity from these two sources. On the other hand, Nepal has also developed larger hydropower projects (>1000 kW) to feed into the national grid. However, intermediate renewable energy systems with capacity between 100-1000 kW are limited.

RERL was launched by GoN, GEF and UNDP to remove the barriers in policy, financing, sustainability and capacity to promote less disseminated technologies such as mini hydro (>100-1000 kW), large micro hydro (>60-100kW), large solar PV (mini grid, institutional and pumping) and mini grids interconnecting several micro hydropower plants.

The Constitution of Nepal 2015 envisaged a three-tiered federal governance structure including federal, provincial and local governments. The constitution mandates local governments to develop renewable energy (RE) and hydropower projects up to 1000 kW. In this regard, AEPC with RERL drafted roles and responsibilities of different levels of governments for RE, which has been incorporated in the recently promulgated Local Government Operation Act 2017. However, local governments have limited technical and managerial capacities to effectively carry out their roles related to RE. In this line, RERL has drafted a methodology for the Municipal Energy Plan (MEP), which assesses energy supply and demand, and identifies financially feasible options to meet the SDG 7 target of reliable and affordable clean energy solutions for lighting and cooking for all. MEP will further help municipalities to prioritize projects and allocate resources accordingly. It is expected that removing barriers in policy and institutional arrangements will help promote mini hydro and large solar PV systems by attracting private investment. Furthermore, RERL has prepared guidelines and modalities to involve private companies in mini hydro development through Public Private Partnership arrangement by forming Special Purpose Vehicle, which has been recognized by the Renewable Energy Subsidy Policy 2016, paving the way for private sector involvement in the development of RE projects.

One of the main barriers for attracting private investment in RE projects in rural areas is the perceived high risks of community owned and managed systems by Banking and Financial Institutions (BFIs). RERL and Central Renewable Energy Fund (CREF) have developed innovative financing mechanisms such as soft credit, credit guarantee, vendor financing and credit insurance to reduce the risks of BFIs in RE investments. Another major reason for the lack of private investment in RE sector is low returns. To enhance revenue generation from RE projects, RERL has been working closely with AEPC to develop mechanisms for promotion of productive energy uses. Moreover, RERL has also been supporting women and marginalized communities to benefit from electricity by establishing enterprises and income generating activities and switching from firewood to electricity for cooking and other household energy needs.

RERL has been working with AEPC to promote demonstration projects that are technically viable and financially attractive for private investment. AEPC, RERL and CREF have been interacting extensively with BFIs and private companies to attract investment in mini hydro, mini grid, large micro hydro and large solar PV systems in different parts of the country. RERL plans to support capacity building of the private sector for development of in-country expertise related to these technologies so that after sales services are readily available. Once demonstration project is completed, and it is expected that the private sector will see the benefits in investing in renewable energy in rural areas.

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4. PROGRAMMATIC REVISIONS -NA

Five key results achieved in 2017

1. In terms of Policy and Institution, the project has supported in the formulation of the following high-level documents: 1.1. Local Government Operation Act 2017 1.2. Technical Guidelines and Standards for grid connection of RETs 1.3. Municipal Energy Plans

2. Private Investment in RE Projects 2.1. Financial Closure of Mini Hydro and Solar PV Projects 2.2. Commercial Operation of MHPs

3. Demonstration Projects 3.1. Construction of Mini Hydropower Projects 3.2. Installation of Solar PV back-up in Snake Bite Treatment Centers 3.3. Grid connection of RETs

4. Capacity Development 4.1. Capacity Enhancement of AEPC 4.2. Decentralization of Training

5. Wrapping up of Relief and Rehabilitation Activities

5. NARRATIVE ON KEY RESULTS ACHIEVED IN 2017

Delivering renewable energy solutions to improve livelihood and conserve the environment, RERL project has been instrumental in providing the needed technical assistance to AEPC in rehabilitation work, policy support, demonstration of new pilots/solutions, productive energy use promotion and capacity enhancement.

Policy and Institution: RERL has been working with AEPC to formulate policies for renewable energy promotion in the country. In the changed context of federalism, RERL provided critical inputs to define roles and responsibilities of the local government which were clearly enshrined in the recently promulgated Local Government Operations Act 2017. Building on the Act, RERL has currently been working with 2 municipalities – Palungtar Municipality, Gorkha and Mahankal Rural Municipality, Lalitpur - to prepare their integrated Municipal Energy Plans (MEP) with a focus on clean lighting and cooking solutions. The methodology to prepare MEP, drafted by RERL, has been finalized with inputs from key stakeholders like municipalities, AEPC and partner organizations including GIZ and ICIMOD. The draft MEP methodology focused on provision of clean cooking and lighting solution for all by 2030, energy for community services such as health centers and schools and enterprises. The methodology is expected to help identify the best solutions considering the life cycle cost of different renewable energy technologies. The Renewable Energy for Rural Areas (RERA) of GIZ will help selected municipalities in Provinces 1 and 7 under the same framework. Hence, RERL’s pilot initiatives have contributed in mobilizing partners to promulgate local level

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energy planning mechanisms, thus contributing towards achievement of national targets of Sustainable Development Goal 7 - increasing the number of people with access to energy.

Likewise, RERL has extensively helped AEPC to reconfigure its roles, responsibilities and mandates in the changed federal context vis-à-vis provincial and local governments. RERL drafted detailed roles and responsibilities of federal, provincial and local governments based on the Constitution of Nepal 2015, which were incorporated in the recently enacted Local Government Operation Act 2017.

To ensure sustainability and wider promotion of Renewable Energy Technologies (RETs) in the country, RERL has supported AEPC and Nepal Electricity Authority (NEA) to develop and adopt technical standards for grid connection of MHP and solar PV systems. NEA has signed Power Purchase Agreements (PPA) with two micro hydropower plants based on the agreed technical standard, opening up opportunities for micro hydro and other renewable energy technologies for grid connection. Furthermore, RERL has prepared guidelines and modalities to involve private companies in mini hydro development through Public Private Partnerships by forming the Special Purpose Vehicle (SPV), which has been incorporated in the Renewable Energy Subsidy Policy 2016, providing access to subsidy for the private sector. It is expected that removing this barrier in policy and institutional arrangements will help promote mini hydro and large solar PV systems with private investment.

Demonstration Projects: To demonstrate financial attractiveness and technical viability of larger RE systems, RERL has been working with AEPC and SASEC to promote large micro hydro, mini hydro, micro hydro interconnected mini grid, large solar system like institutional solar, solar pumping and solar mini grid and grid interconnection of RETs. In 2017, construction of two new mini hydropower projects, with capacity of 0.4 MW, were installed benefiting over 4,500 households with the support from RERL and SASEC. Likewise, RERL and AEPC have been supporting two other projects with the total installed capacity of 0.64 MW, which expected to benefit 2,800 households. These projects have been developed under PPP modality with financial participation of the government, commercial banks and beneficiary communities. It is expected that these projects will not only generate enough revenue to hire professionals for day-to-day operations but also pay back their loans on time, reducing perceived risk of investing in community owned renewable energy systems in remote locations.

RERL provided 1.5 kWp solar PV backup systems at Snake Bite Treatment Centers in Letang, Morang, Itahari, Sunsari and Chariali, Jhapa. The system has been providing uninterrupted power supply to operate refrigerated storage for anti-snake venom vaccines along with fans, lights and nebulizers to improve the public service being provided by the Centers. On average, more than 1,500 snakebite cases are treated by the centers every year. Acknowledging the remarkable impact this solar system has had in reducing snake bite casualties due to disrupted services, AEPC has planned to replicate the model by supporting PV backup system in 25 Snake Bite Treatment Centers in the coming fiscal year (2018/19).

The 23 kW Syaurebhumi MHP in Nuwakot has successfully been synchronized with the national electricity grid, which is the first grid connection of less than 100 kW capacity thus setting an unprecedented example of how micro hydropower plants can contribute to the grid, thereby mutually benefiting the overall grid and the community’s income generating capacities. The 23 kW Syaurebhumi and the 40 kW Leguwa Khola, Dhankuta MHPs have already signed Power Purchase Agreement with NEA where AEPC provided financial support for electrical equipment while RERL’s financial support for civil works enabled interconnection of the two systems. These two projects have been selected for grid interconnection as the grid encroached their catchments immediately after commissioning.

RERL provided technical and financial support to Surya Power Company to connect its 1000 kW solar PV system in to the grid. This is the first time in Nepal where a captive generation solar plant has been grid connected thus unfolding previously untapped energy source contributing to achieving 9 | Page

December, 2017 ANNUAL PROGRESS REPORT national SDG 7 target of increasing the number of grid connected solar PV systems (Indicator 7.2.1.3 of national SDG targets).

Private Investment in RE Projects: CREF, with RERL support, has established innovative financial instruments such as soft credit, credit guarantee and insurance to reduce the risks of BFIs to invest in RE projects. With the provision of credit guarantee mechanisms, RERL and SASEC have been able to realize financial closure of two mini hydropower projects through credit from commercial banks amounting to NPR 26 million1. Similarly, CREF has been supporting Sahara Nepal Cooperative (SNC) in eastern Nepal to promote domestic size solar water pumps with private equity and micro-finance lending for both domestic purpose and irrigating kitchen gardens. 11 such pumps have already been installed with a total investment (equal amount of equity and credit) of over NPR 600,000. According to SNC, there is increased demand for small scale solar pumps after the demonstration. Hence, CREF has been working with SNC and other co- operative micro finance companies to develop loan products to serve the demand.

To demonstrate financial viability of MHPs, RERL has been supporting 20 MHPs in five districts for commercial operation wherein the micro hydro is seen not only as a social infrastructure but also a commercially feasible enterprise. RERL support includes community mobilization, institutionalization of MHPs and end use promotion. After RERL intervention, the monthly revenue collection of 83 kW Darna MHP in one of the most remote districts of Nepal (Achham) has increased five folds from a meagre NPR 25,000. This intervention also showed that with more reliable services, customers were willing to pay increased tariffs.

Capacity Development: RERL has been working with various stakeholders to enhance capacities to promote, develop, operate and manage RE systems ensuring Gender Equality and Social Inclusion (GESI). RERL has been designed to assist in building up AEPC’s capacity for wide scale promotion of larger RETs. Beside support for policy and institutional strengthening of AEPC, RERL has provided extensive inputs in the design and formulation of GIZ funded RERA and an upcoming DFID supported programme. Furthermore, RERL and UNDP have been supporting AEPC to get accredited Green Climate Fund (GCF).

Another major intervention of RERL in 2017 was to decentralize MHP operator and manager trainings. Previously, all such trainings were organized in which were very expensive and had no provisions for peer-to-peer (P2P) learning. RERL organized two trainings in Babiyachaur, Surkhet; technically facilitated by MHP expert and two MHP operators whereas facilitation on management was provided by RERL personnel and MHP management. The P2P learning was appreciated by the trainees. Moreover, as the training was held in rural setting, the cost was almost reduced to half. It is hoped that the Babiyachaur MHP will gradually be developed as a training center catering to MHPs in the Mid- and Far- Western Regions. Promoting similar training centers in other regions will help decentralize RE-related trainings and minimize their operating cost.

Wrapping up of Relief and Rehabilitation Activities: After the devastating earthquakes of 2015, RERL had provisioned USD 1 million for relief and rehabilitation activities. RERL immediately provided 28 mobile phone charging systems in for quick recovery of communication network and conducted rapid assessment of damages to 140 MHPs and 45 solar water pumping systems supported by AEPC. RERL worked closely with AEPC to prepare Post Disaster Needs Assessment (PDNA) related to renewable energy for the National Planning Commission (NPC). Then, RERL focused on provision of electricity for government offices, health posts, birthing centers, schools and temporary learning centers. As a result, installation of 230 institutional PV systems and rehabilitation of 56 MHPs with the total installed capacity of around 1.25 MW were supported, benefiting 180,486 households.

1 UN Exchange rate for December 2017 is $1=NPR 102.9 10 | Page

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GESI: RERL supported AEPC to formulate its productive energy use promotion modality which helped women and marginalized communities to benefit from access to electricity by establishing enterprises and income generating activities with provision of additional financial assistance. Until now, 1,182 productive use enterprises have been established with financial assistance of AEPC; of which 1070 are owned by male, 82 by female and 30 by community. These enterprises employ 2,955 people. Besides, AEPC has also supported 3,151 income-generating activities (IGA) benefiting 14,809 people from marginalized communities.

Following table shows the linkage of outcome and output statements of the project:

Table 1: Outcome and Output Statements

Outcome Statement Output Statement UNDAF/CPAP Outcome 2: UNDAF/CPAP Output 2.4: Vulnerable groups have increased Vulnerable groups have access to sustainable productive assets and environmental improved access to economic services opportunities and adequate social protection UNDP Output 2.4.1. AEPC's capacity enhanced for scaling up energy services in the rural areas Project Outcome 1: Output 1.1: Approved and enforced policy that enables PPP model Strengthened legal, for mini hydro and large scale solar PV development, including institutional and policy fiscal incentives and sustainability for possible changes in Nepal environment to support RE government structure and other low – carbon Output 1.2: Methodology and database developed and made technology development and available for incorporating mini hydro and large scale solar PV utilization systems into district RE plans Output 1.3: Completed training and awareness programme for relevant government agencies and stakeholders on mini hydro and large scale solar PV systems development and productive end use Project Outcome 2: Increased Output 2a.1: Commissioned mini hydro demonstration projects investment in RE totaling 1 MW through PPP model Output 2a.2: Commissioned mini grid demonstration projects totaling 300 kW Output 2a.3: Commissioned large scale solar PV demonstration projects totaling 500 kW Output 2b.1: Demonstrated PPP models facilitating cooperation between private sector, public sector, and local organizations through establishment of Special Purpose Vehicles (SPV) in three selected mini hydro project (1MW) Output 2b.2: Demonstrated financially sustainable and reliable mini grid connecting 10 micro hydro systems (300 kW) Output 2b.3: Demonstrated financially sustainable and reliable large scale solar PV system (300 kW) Output 2b.4: Operationalized 2 MW of off- grid large micro hydro (over 60 kW) power projects demonstrating cost advantage feasibility, productive end use, and best practice through technical assistance Output 2b.5: Completed financial closure of 7 MW of off-grid mini- hydro power projects replicating PPP model through establishment

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of SPVs, demonstrating cost-advantage, feasibility, productive end- uses, and best practice through technical assistance Output 2b.6: Completed financial closure of 2 MW of large scale solar PV systems, demonstrating cost advantage over smaller PV systems, feasibility, productive end-uses, and best practice through technical assistance Project Outcome 3a: Improved Output 3a.1: Established a wholesale financing instrument to availability of financial incentivize Banking and Financial Institutions (BFIs) for financing investment supports for rural domestic manufacturers to meet growing orders and be cost RE and other low-carbon competitive technology applications Output 3a.2: Established a wholesale financing instrument to incentivize Banking and Financial Institutions (BFIs) to promote commercial financing for mini-hydro and large-scale solar PV projects Project Outcome 3b: Improved Output 3b.1: Designed and provided technical support for financing design and packaging of platforms and services for promoting commercial financing for investment support domestic manufacturers mechanisms for rural RE and Output 3b.2: Designed and provided technical support for financing other low-carbon technology platforms and services for promoting commercial financing for applications mini-hydro and large-scale solar PV projects Output 3b.3: Developed training materials on mini-hydro and large- scale solar PV projects for financing institutions Output 3b.4: Created matchmaking platform for mini-hydro and large-scale solar PV developers, financing institutions, and equity investors, and productive end users Output 3b.5: Established functional enterprises adopting productive use of electricity Output 3b.6: Operationalized mechanism to promote financial products for entrepreneurs/end users Output 3b.7: Ensured women and marginalized/vulnerable groups own 33% of the functional electricity based enterprises established Project Outcome 4: Enhanced Output 4.1: Established database of technical specifications for the capacities and skill of various design, manufacture of micro hydro (60+ kW) and mini hydro , stakeholders in the RE sector installation and after sales service in micro hydro (60+ kW) and large scale solar PV systems Output 4.2: Fully trained skilled and technically capable people available for project identification, feasibility studies and detail design of mini hydro projects Output 4.3: Fully trained, skilled and technically capable mini hydro manufacturers in identified areas with after sales services Output 4.4: Fully trained, skilled and technically capable construction and installation teams within companies to improve quality of installed mini hydro projects and large solar PV system Output 4.5: Fully trained, skilled and technically capable people available for operation, maintenance and business management of mini hydro projects and large scale solar PV systems

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Progress towards the UNDAF/CPAP Outcomes

Table 2: Progress on Outcome Indicators

Outcome Outco Baselin Cumulat Total target achieved Milesto Achieve Milestone for Achievement 2017 Year for Source stateme me e ive till 2015 ne for ment 2017, if any the latest of data nt indicat Target 2016, if 2016 data or for any 2013 - 2017 UNDAF # of 59,172 25,000 24,159 HHs benefitted 30 kW 53,898 50,000 HHs (1) Altogether 17,690 2017 UNDP Output househ househ HHs (2013 = 11965, 2014 = solar PV househol benefited from households connected Nepal 2.4 olds in olds connecte 8351, 2015 = 3843) systems ds services to electricity access County Vulnera remote d to installed benefited provided by (5,995 rehabilitation of Progra ble areas energy ; 600 kW from Public MHP + 11,695 TA m groups connect services rehabilit energy Institutions support to AEPC for Action have ed to ation of services. that have installation of MHP) Plan increase energy earthqua access to d access services ke Financial electricity after (2) 53,669 HHs directly to (UNDA affected closure of earthquakes. benefited from sustaina F 1 MHPs; 200 kW electricity access to ble #2.4.3) financial initiated. their Health post/ producti closure Birthing Centre, ve assets of 500 VDC/DDC Offices, and kW mini Schools, Temporary environ hydro Learning Centers, mental complet Snake Bite Treatment services ed Centers

(3) 400kW Financial Closure of Mini Hydro completed (200kW Simrutu Khola, Rukum + 200kW Giri Khola, Jumla)

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Highlights of 2017

Outcome 1: Outcome 3: Improved Strengthened legal, availability of financial institutional and policy Outcome 2: Increased investment supports for Outcome 4: Enhanced environment to support investment in RE rural RE & other low- capacities & skill of RE and other low – carbon technology various stakeholders in carbon technology application the RE sector development and utilization

• Local Government • Grid connection of 23 kW • Commercial Operation of • Enhanced capacity of 40 Operation Act – Micro Hydropower Plant in 25 micro hydropower MHP Managers including Renewable Energy in National Grid in Nuwakot plants two women for Federal Context • Co-operative commercial operation of • AEPC re-positioning in • Financial assistance to strengthening & Micro the Micro Hydropower the federal context connect a 1MWp solar Finance for Simrutu Khola plant • Standards for Grid plant to the national grid Mini Hydro • Training for 46 Micro connection of RETs in Nawalparasi 83 Hydro Operators • Workshop on Enabling • Installed 1506.2 kWp • 83KW Darna Micro • 51 women entrepreneurs Environment for Mini solar PV systems in solar Hydropower Plant (MHP) trained on business Hydro in Nepal mini grid, pumping & run MHP as an management • Piloted Municipal Energy institutional solar system in Enterprise Plan in 2 Municipalities schools/ learning centers & government offices

Progress towards Outcome 1: Strengthened legal, institutional and policy environment to support RE and other low – carbon technology development and utilization

Outcome 1: This outcome focuses on formulation of policies, institutional arrangement and capacity development of governmental agencies to create conducive policy environment for private investment in renewable energy projects. The project has supported the Government of Nepal, specifically AEPC in drafting the roles and responsibilities of Federal, Provincial and Local Level governments relating to alternative and renewable energy in the changed context of federalism. RERL has also been assisting the nodal agency in defining the institutional structure of alternative energy promotion in the new context.

RERL has been working with government agencies, including AEPC to build their capacity to develop mini hydro and larger solar PV systems. RERL has drafted and is supporting two municipalities namely Mahankal Rural Municipality, Lalitpur and Palungtar Municipality, Gorkha to pilot the preparation of Municipal Energy Plan (MEP). The methodology for preparing the plan to replicate in other municipalities. Similarly, the project has helped AEPC to prepare various concepts, standards and guidelines to optimize design, efficient service delivery and promote renewable technologies.

Progress on Output 1.1: Approved and enforced policy that enables PPP model for mini hydro and large scale solar PV development, including fiscal incentives and sustainability for possible changes in Nepal government structure

RERL extensively supported the drafting of the Renewable Energy Subsidy Policy 2016, which opens opportunities for private participation in RE development. The policy specifically discusses the public private partnership (PPP) model for developing RE projects in the country. Supplementing this enabling policy, RERL has also been working with CREF to design and operationalize financial instruments such as soft credit, credit guarantee, vendor financing and credit insurance to foster private sector confidence in RE investments.

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RERL has supported AEPC to develop the Best Available Technology (BAT) model for rural areas. BAT is included in the approved RE Subsidy Policy 2016 and Subsidy Delivery Mechanism to identify the most suitable RE alternative for powering rural villages. BAT examines the energy services required at a particular location and identifies the least cost option. This mechanism has been in practice after it was approved by Ministry of Population and Environment (MoPE) in 2016.

Community managed systems use common resources and its management affected by social, political, and economic structures in society. The quality and reliability of energy supply is key to the sustainability of technological options adopted for enhancing energy access. The sustainability of the system and its economic viability depends upon the amount of return contributing to local livelihoods. In this backdrop, RERL and SEforALL are collaborating with University of New South Wales (UNSW), Australia in carrying out a study to provide the basis for devising suitable police and strategies for AEPC that clearly spells out the tiered energy access concept and provides support to rural communities and households to engage in economic activities and help uplift their livelihood.

In 2017, AEPC and NEA signed an MoU and organized coordination meetings to discuss the activities related to collaboration between the two organizations specifically related to grid connection of RE systems while agreeing and developing applicable national standards. AEPC/ RERL, the Department of Electricity Authority (DoEA) and NEA have been working together to prepare guidelines for a Detailed Feasibility Study of grid connected large solar PV system projects. The project has also drafted Standards and Technical Specifications for Grid Interconnection of Micro Hydro Plants (MHP). It is envisaged that the grid interconnection of micro hydro will ensure sustainability since additional revenue will be generated.

RERL supported Nepal Electricity Authority (NEA) to promote megawatt (MW) scale projects in Nepal, provided technical inputs for preparing Request for Proposal (RfP), and bid evaluation, including finalization of the energy tables of the submitted proposal. NEA plans to add over 60 MW of solar PV projects to its system near major load centers to reduce load-shedding hours and reduce dependence on imported electricity.

In order to orient energy sector actors particularly micro hydro installers and consulting firms on private sector led Energy Service Company (ESCO) model, RERL supported Nepal Micro Hydro Development Association (NMHDA) to organize national workshop on “Public Private Partnership approach for development of Mini/Micro Hydro and Micro Utility Model”. The workshop provided important insight on the need and relevance of the private sector in mini hydro project development, which will be a significant shift from the traditional community owned and managed approach. Until now, the private sector has only participated as vendors and suppliers of equipment and services in mini/ micro hydro projects. After the workshop, some of the NMHDA members have started working to identify suitable projects to develop with their and beneficiaries’ equity along with government subsidy and bank loan.

To encourage participation of more vendors, RERL and SASEC organized a one-day interaction programme in Butwal on 7 July 2017. Information on AEPC’s and ADB’s procurement requirements disseminated to participants. Altogether 13 engineers, technicians and management personnels from different companies, mainly micro hydro manufacturers and installers, participated in the programme. A site visit to the Phawa Khola, Taplejung was also organized. As a result, of these efforts, 4 bids for supply of equipment and construction of the 500kW Phawa Khola Mini Hydro Project were submitted. Likewise, RERL/CREF and ADB organized a ‘match making’ platform in early 2017 to showcase potential mini hydro projects to BFIs to attract private financing.

RERL, in collaboration with Practical Action Consulting and United Nations Environmental Programme (UNEP), carried out a case study on Mini Hydro performance in Nepal. The study considered: i) current policy enablers, ii) stakeholder mapping through Participatory Market System Development (PMSD) Framework, iii) case studies of 6 Mini Hydro and 2 Small Hydro Projects, and iv) a Household Survey to assess consumer

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December, 2017 ANNUAL PROGRESS REPORT satisfaction. The study made recommendations for private sector led development of mini hydro in the country as well as post construction support required for smooth operation of the plants. The study found that the 400kW Salleri Chialsa Mini Hydropower Project (SCMHP) in the vicinity of Mount Everest in was the best managed project. RERL has prepared mini hydro operation and management manual based on the experience of SCMHP with the expectation that good practices will be replicated in AEPC supported mini hydro projects. In addition, the SCMHP management team provided orientation to prospective developers of AEPC supported mini hydropower projects on efficient operation and management. In 2017, RERL also supported CREF to prepare documents on deprived sector lending ceiling for mini hydro and organized meetings with Nepal Rastra Bank (NRB) to amend the ceiling limit from NPR 10 million to NPR 30 million leading to most mini hydropower projects supported by AEPC qualifying for loans under this provision. This also encourages banks to invest in mini hydro projects.

Progress on Output 1.2: Methodology and database developed and made available for incorporating mini hydro and large scale solar PV systems into district RE plans

In the new federal system, municipalities have been given the responsibility to develop small hydropower and renewable energy projects. Building on the methodologies developed for AEPC’s District Climate and Energy Plan (DCEP) and District Electrification Master Plan (DEMP), RERL prepared a framework and methodology for preparing Municipal Energy Plan (MEP). The MEP preparation process starts at the Ward level where the status of electrification and cooking fuel in use in each ward is identified and the cost effective alternatives among grid extension, mini/micro hydro, solar PV, biogas and improved cooking stove is analyzed. Aggregation of Ward level plans will be the basis for the Municipal Energy Plan, which will be GIS based. Based on the drafted framework and methodology, RERL is supporting two municipalities – Palungtar Municipality, Gorkha and Mahankal Rural Municipality, Lalitpur – to pilot MEP preparation, in close collaboration with GIZ’s Renewable Energy for Rural Areas (RERA) project. RERA is assisting AEPC to develop frameworks, modalities, guidelines, manuals, etc. for promotion of RE projects in the new federal structure. RERA will also supplement RERL initiatives by implementing preparation of MEP in Provinces 1 & 7 (RERA working areas) under the same framework and methodology.

To calculate potential areas for development of rooftop solar PV systems in each location, RERL developed a software/application tool “Rooftop Solar Estimator” in 2016. The software helped in alleviating existing power deficiency in residential, commercial and industrial buildings and promoted cost effective opportunities to generate their own electricity, making them less dependent on the national grid. Likewise, RERL developed an android-based survey, the Renewable Energy Survey Tool, in 2017 to improve the quality of pre-feasibility and reconnaissance survey. This tool is compatible to operate on a smart phone, tablet and computer. AEPC plans to upload the tool on its website and make it mandatory for pre-feasibility studies.

Progress on Output 1.3: Completed training and awareness programmes for relevant government agencies and stakeholders on mini hydro and large scale solar PV systems development and productive end use

To clarify roles and responsibilities of government agencies in promotion of RE in the changed federal context, RERL has drafted a document highlighting roles and responsibilities of local, provincial and federal governments, including AEPC. It is envisaged that this document will help streamline activities at different levels of governance. The roles and responsibilities of the Local Level in line with the new Constitution of Nepal, with key inputs from RERL, has been reflected in the Local Government Operations Act 2017.

To fulfill the ambitious targets of GoN to provide access to clean cooking and lighting solutions to all households by 2030, in line with SDG 7, RERL provided inputs to develop UNDP’s Country Programme Document (CPD) for 2018-2022 on activities related to renewable energy and inclusive economic growth. In the new document, energy has been reflected as a signature solution for improving resilience against natural 16 | Page

December, 2017 ANNUAL PROGRESS REPORT disasters and climate change effects and as a means for enhancing livelihoods in rural areas through economic activities.

The GoN has recommended AEPC for accreditation to Green Climate Fund (GCF) and RERL has been supporting AEPC to prepare the necessary documentation in this process. As a result, AEPC has entered Stage 2 of the accreditation process and to bolster the process, and RERL has supported AEPC’s participation in a Peer-to-Peer workshop. Once accreditation achieved, AEPC will have access to funds for promoting RE projects. To upscale lessons from implementation of RERL on private investment in RE projects, a concept paper has been developed seeking access to GCF funds.

Hydro Power Empowerment Network (HPNET) is a forum mainly of practitioners, hydropower policy makers and hydropower regulators in South Asia and South-East Asia. RERL has been engaged with HPNET for more than 2 years in several activities and has prepared Frequently Asked Questions (FAQ) on grid connection of MHP to be published online on the HPNET website . RERL has been sharing Nepal’s experience in mini grid and grid connection of RE technologies and pre-paid meters with organizations and experts from around the region.

The regional meeting on Sustainable Energy for Asia-Pacific LDC countries jointly organized by the UN Office of the High Representative for LDCs, LLDCs and SIDS (UN-OHRLLS) and the Government of Nepal, with support from UNDP Nepal Country Office on 22 and 23 March 2017 in Kathmandu. The SEforALL team provided substantial inputs in preparation and organization of this meeting. The Regional Meeting was aimed at building national leadership on energy sector and creating stronger multi-stakeholder partnerships to improve access to finance, with major highlights on the SEforALL implementation agenda, SDG 7 implementation process, financing, and project development. Key stakeholders from Asia Pacific LDC countries, international organizations and the private sector participated in open discussions sharing their knowledge and experiences to disseminate best practices around the region.

Progress towards Outcome 2: Increased investment in RE

Outcome 2: This outcome deals with increased investment in RE projects with provision of financing mechanisms and demonstration of technically sound and financially viable mini hydro, mini grid, large solar PV and large micro hydro projects. RERL has been working with Central Renewable Energy Fund (CREF) of AEPC to establish financing mechanism to attract private investment in renewable energy projects. CREF support will initially go to demonstration projects promoted by RERL/AEPC.

Most of the budget allocated for supporting demonstration projects reallocated to support government’s relief and rehabilitation efforts after the 2015 earthquakes.

Progress on Output 2a: Commissioned 1MW mini hydro, 300 kW mini grid and 500 kW large scale solar PV demonstration projects through PPP model

Output 2a provisions activities to establish different financial mechanisms to attract private investment in renewable energy demonstration projects supported by RERL. In this regard, RERL has supported CREF to establish and operationalize financial instruments such as soft credit, credit guarantee and vendor financing for renewable energy projects.

With the closing of donor funding for NRREP, AEPC has facilitated collaboration between RERL and Asian Development Bank (ADB)-funded South Asia Sub-regional Economic Cooperation (SASEC) programme to jointly promote mini hydro and solar mini grid projects. RERL and SASEC have collaborated to support AEPC in identifying 7 mini hydropower projects for development. These projects include 500kW Phawa Khola in Taplejung, 184kW Namche, 512kW Manjo Khola and 186kW Bom Khola II in Solukhumbu, 200kW Simrutu 17 | Page

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Khola and 200kW Sani Bheri Khola in Rukum, and 200kW Giri Khola in Jumla. In this arrangement, SASEC will provide financial assistance (both loan and subsidy) to develop these projects and RERL will provide technical assistance necessary for financial closure through operation and management of the projects.

RERL and SASEC, through CREF, supported the community to successfully achieve financial closure of Simrutu Khola and Giri Khola Mini Hydro Projects in Rukum and Jumla respectively. Civil Bank and Nepal Investment Bank have provided commercial credit line of NPR 26 million to support the two projects. RERL has also supported financial closure of Bagaune Khola Micro Hydro Project, Rolpa.

Table 3: List of Mini Hydro Projects under Construction

Projects kW HHs District Status

Civil works under construction Simrutu Khola 200 1,386 Rukum Institutional Strengthening of cooperative initiated Negotiation with NIBL for credit funding Giri Khola 200 1,840 Jumla Institutional Strengthening of cooperative ongoing Contract awarded for supply & installation of electro- Phawa Khola 500 2,093 Taplejung mechanical equipment & civil works 700 M canal completed Special Purpose Vehicle (SPV) established Tara Khola 394 2,200 Baglung Intake, Canal, Desilting Basin, Forebay completed Engineering drawings for civil components prepared Upper Junbeshi 250 615 Solukhumbu Construction of civil works ongoing Total 1,544 8,134

Progress on Output2b.1: Demonstrated PPP models facilitating cooperation between sector, public sector, and organizations through establishment of Special Purpose Vehicles (SPV) in three selected mini hydro projects (1 MW)

RERL/SASEC/AEPC has been supporting the development of following mini hydro projects:

Table 4: List of Mini Hydro Projects online Projects kW HHs District Status

Special Purpose Vehicle (SPV) established Lower Bom Khola 282 620 Solukhumbu Engineering drawings for civil components being prepared Khtayad Khola 500 3,200 Mugu TRC Approved Patrasi Khola 500 2,500 Jumla DFS Completed Tap Khola-II 303 2,671 Khotang Cost revision & 100 M canal completed Theso Khola 250 NA Solukhumbu DFS Completed Lung Khola 500 NA Pyuthan DFS Completed Chuwa Khola 1,000 NA Humla DFS Ongoing Ghami Khola 500 1,000 Mustang ABC model World Bank - Yeti Airlines

Total 3,835 9,991

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Progress on Output 2b.2: Demonstrated a financially sustainable and reliable mini grid connecting 300 kW micro hydro systems

RERL has been supporting AEPC to implement Component 3 of the World Bank funded Kabeli Transmission Project. The Taplejung Mini Grid interconnecting 6 mini and micro hydropower plants to evacuate electricity to the district headquarters is being developed under this project. RERL has provided assistance to finalize the detailed feasibility study of the project and to establish the Taplejung Mini Grid Development Functional Group. RERL designed control and protection systems for interconnection and parallel operation of micro hydro power plants with AEPC allocating NPR 10 million to procure and install the system. RERL has also been supporting the communities to procure goods and services. RERL also provided assistance to assess bids for installation of 11 kV transmission line, and prepare the Vulnerable Community Development Plan and Environment Assessment related to the mini grid. The Taplejung Mini Grid Functional Group has already completed the installation of 37 km of the 11 kV transmission line.

The 23kW Syaurebhumi MHP of Nuwakot, the first grid connected MHP of less than 100kW, was successfully synchronized with the national electricity grid in 2017. The MHP has already signed Power Purchase Agreement with NEA. AEPC provided financial support for electrical equipment and RERL provided assistance for civil works required for interconnection of the two systems. AEPC and NEA had agreed to interconnect MHP less than 100kW with the national grid in 2015 and PPA was signed by NEA and Syaurebhumi MHP in 2016. AEPC/RERL has also supported interconnection of the 40kW Laguwa Khola MHP, I Dhankuta to the grid. Interconnection of micro hydro with the grid has helped generate additional revenue for the MHP and avoid transmission losses for NEA. Furthermore, having generation systems at the end of the line helped improve voltage quality and system reliability. Based on the experience, NEA and AEPC will gradually connect MHPs where the national grid intersects MHP service areas.

Similarly, RERL provided technical support to AEPC for conducting feasibility study of grid connection of 4 MHPs: Thalaligad 30kW and Agrigad 25kW in Darchula and Putpute Khola 44kW and Putpute Khola II 98kW, in Syangja.

Progress on Output 2b.3: Demonstrated large scale solar PV systems under relief and rehabilitation activities and through Technical Assistance (500 kW total)

To promote solar PV based systems, RERL collaborated not only with AEPC but also with other different organizations so that the systems continue to receive financial and technical support after the installation. In this regard, partnership has been fostered with diverse organizations ranging from Nepal Army and government agencies, such as Nepal Oil Corporation and Department of Irrigation, to local non-governmental organizations.

As large scale solar PV systems such as solar mini grid, institutional solar for schools and health posts, and solar pumping for water supply and irrigation are relatively new in Nepal, RERL has been focusing on providing technical assistance to AEPC and other institutions to design, implement and develop innovative concepts. In 2017, RERL prepared the concept note on using Solar PV to power Fuel Pump Stations. The concept note was submitted to the Nepal Oil Corporation under the Ministry of Commerce and Supplies. Similarly, RERL provided financial assistance to connect a 1 MWp solar plant in Nawalparasi district to the national grid. This is the first instance in Nepal where a captive solar plant has been connected to the national grid. Similarly, AEPC provided financial and technical support for installation of 15 kWp grid connected solar PV system at Nepal Engineers Association building in Lalitpur. Interconnection of small generation systems at the end of the line has helped improve quality of electricity and proper utilization of spilt energy.

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RERL supported AEPC to install 35kWp Solar Mini Grid System in Harkapur, Okhaldhung and 25kWp Solar Wind Hybrid Mini Grid System in Bhorleni, Makawanpur. The project is funded by the Asian Development Bank (ADB). Though both the systems have been operating well, it has been a struggle to meet the increasing demand of the community. In this context, RERL has conducted a detailed feasibility study for up gradation of the promoted solar and wind hybrid mini grid systems. In addition, AEPC and RERL collaborated with DDC Makwanpur to establish a cooperative in Bhorleni to bring together 140 beneficiary households to manage and sustainably operate the 25kW wind-solar hybrid system.

At AEPC’s request, RERL carried out detailed feasibility studies of potential mini grid, institutional solar and solar pumping sites in , and of potential mini grid sites in Ward No. 1 and 2 of Kimri VDC and Ward No. 4 and 5 of Rowa VDC, Mugu. It is expected that the solar mini grid will help to fulfill the local community’s demand for electricity and support solar driven productive energy use.

RERL supported AEPC and SASEC to develop 13 solar mini grid projects, including site selection, finalization of feasibility study, bid document preparation particularly technical specifications and on-site monitoring during the installation. As Nepal has limited experience in installation and operation of solar mini grid, these projects will help develop the in-country capacity for up-scaling in the future. Solar PV based projects with technical and/or financial assistance from RERL are listed below:

S.N. Project Location District kWp Type Funding 1 Kamal Bazaar SWMG Kamal Bazar Achham 31.0 SWMG AEPC 2 Harrekanda Surket Surket Harrekanda 7.2 SWMG AEPC 3 Chisapani Chisapani Sindhuli 35.0 SWMG AEPC/SASEC 4 The Commission for the Naxsal Kathmandu 375.0 ISPS AEPC Investigation of Abuse of Authority (CIAA). 5 Telkuwa Solar Irrigation Telkuwa Bara 4.0 Agro RERL 6 Snake Bite Treatment Center Letang Morang 2.0 ISPS RERL 7 Snake Bite Treatment Center Itahari Sunsari 2.5 ISPS RERL 8 Snake Bite Treatment Center Charali Jhapa 2.5 ISPS RERL 9 Nawalparasi Captive Solar PV plant Ranipakar Nawalparsi 1000.0 Captive Surya Solar PV Power 10 Ramite Khola Morang 35.0 SMG RERL 11 Khtwara Health Post Katwara Salyan 3.0 ISPS RERL 12 Simrutu Health Post Simrutu Rukum 3.0 ISPS RERL 13 Kabilasi Mini Grid - Solar Pumping Kabilasi Sarlahi 6.0 SMG RERL Total 1,506.2

Table 5: List of Solar PV Projects

The project has worked on (i) 34kWp (ii) 22kWp Bajhang Parakatne Mini Grid (iii) 35kWp Hariharpur Gadhi Sindhuli Mini Grid Project (iv) 30kWp Ramite Khola, Morang (v) 8kWp Surkhet and (vi) 30 kWp Kamal Bazar, Achham.

RERL provided 1.5kWp solar PV backup systems at Snake Bite Treatment Centers in Letang, Morang, Itahari, Sunsari and Charali, Jhapa. The systems provide continuous electricity to power refrigerators to store snakebite anti-venom vaccines at between 2˚C and 8˚C, fans, lights and nebulizers. On average, more than

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1500 snake bite cases were treated by the centers each year. After knowing the huge impact of solar systems, AEPC has planned to support PV backup system in 25 other Snake Bite Treatment Centers in FY 2074/2075.

The Energy for Education (E4E) concept has been piloted by RERL in two schools of Dhading and Parsa districts in 2016. This initiative has provided opportunity to learn through audio-visual interactions. After success of the pilot project, RERL supported to install 1.5kWp solar PV system in Sahid Chandeswhor Lower Secondary School in in 2017. Besides students, local women and men from disadvantage groups were able to learn about the use of computers. Moreover, the system has been used in the local cyber cafe which has helped generate revenue for sustainable operation of the system, enhancing its potential to be replicated.

With RERL’s financial and technical support, 4kWp solar PV system installed in Telkuwa Solar Irrigation Project in Bara. Telkuwa Krishi Company, a Special Purpose Vehicle owned by beneficiary farmers and a private company, owns the system. In 2017, RERL provided financial assistance to the company to work on various aspects of the vegetable value chain. This will help improve revenue generation of the project. Similarly, RERL, with the financial support from UNESCAP, has installed solar pumping systems for water supply and irrigation through an SPV at the Chepang Community of Raksirang, Makawanpur.

RERL provided technical support to the World Bank and AEPC on implementation of Anchor-Business- Customer (ABC) projects. It has provided Geo-coded information of energy infrastructure projects in Nepal and helped select candidate sites for implementation. The World Bank is also considering grid interconnection of Renewable Energy Technologies under the project.

Relief and Rehabilitation: Under relief and rehabilitation, RERL supported installation of 72 solar systems in schools, health posts and public offices of earthquake affected districts. Likewise, RERL also supported to rehabilitate 27 MHPs with total installed capacity of 633 kW and 9 PVPS in 2017.

After the devastating earthquakes of 2015, RERL RERL AEPC Grand Total provisioned USD 1 million for relief and rehabilitation activities immediately providing Micro Hydro 28 mobile phone charging systems in Dolakha district for quick recovery of communication No. 56 39 95 network and conducting a rapid damage kW 1,337 1,417 2,754 assessment of 156 MHPs and 45 solar water- pumping systems supported by AEPC. RERL HHs 13,143 14,170 27,313 worked closely with AEPC to prepare Post Institutional Solar PV Disaster Needs Assessment (PDNA) related to No. 72 150 175 renewable energy for the National Planning Commission (NPC). Then, RERL focused on kW 21.6 700 721.6 providing electricity to government offices, health posts, birthing centers, schools and HHs 53,403 NA 53,403 temporary learning centers, and also provided Table 6: RE Systems supported by AEPC and RERL under relief and technical support to implement other AEPC rehabilitation supported relief activities funded by DfID. RERL has provided support on the rehabilitation of 230 such institutional PV systems and 56 MHPs with the total installed capacity of around 1.25 MW (See Table 6). With these supports, 180,486 households have benefitted from overall energy services.

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Progress on Output 2b.4: Operationalized 2 MW of off-grid large micro-hydro (over 60 kW) power projects demonstrating cost-advantage, feasibility, productive end-uses, and best practices through technical assistance

RERL has been assisting Community Electrification Sub Component (CESC) of AEPC to promote large micro hydro projects in various ways, from conducting detailed feasibility studies to project supervision and monitoring. In 2017, AEPC supported communities to install 17 MHPs with the total capacity of 932.5 kW benefiting 7,696 households.

RERL also supported on updating Power Output Verification (POV) Guidelines and training Power Output Verification Inspectors (POVI). POV is an important monitoring mechanism to ensure the quality of works done by contractors, which is required before the release of final installment of subsidy for completed MHPs.

However, AEPC has been implementing micro hydro projects in Nepal. The government subsidies with the right to basic lighting approach, many micro hydropower plants are not optimally utilized. The new enterprise based approach is expected to encourage beneficiaries to make productive uses of electricity so that not only the local people benefit from availability of different services but also the MHP itself generates more revenue to be sustainable. Hence, RERL has started working with the beneficiaries in 25 MHPs for commercial operation. Details are discussed in section 3b.5.

Progress towards Outcome 3: Improved design and packaging of investment support mechanisms for rural RE and other low-carbon technology applications

This outcome deals with improved design and packaging of investment support mechanisms for rural RE and low-carbon technology applications in Nepal. A detailed study carried out by RERL to identify the reasons why Banks and Financial Institutions (BFIs) were reluctant to finance RE projects in rural area and the kind of support required to make the investment less risky. The study recommended designs and operationalization of financial instruments such as soft credit, credit guarantee and insurance to help reduce the perceived risks by the BFIs for attracting private investment in the RE sector in general and community owned projects in particular. The study has been widely discussed and disseminated with plans to integrate the findings within CREF’s Business Plan. A soft credit and credit guarantee mechanism for financing mini hydro demonstration projects and vendor financing mechanism for small solar PV pumping for irrigation has been established and is operational. It is expected that more fund will be available through these mechanisms to upscale RE in Nepal.

To encourage private sector and BFIs in the sector, RERL jointly organized an Investors’ Forum with AEPC and Asian Development Bank, ad showcasing potential mini hydro projects. RERL has organized several site visits for BFIs interested in providing loans to mini hydro projects. However, BFIs have indicated reluctance to finance RE projects in rural areas so far because they consider this a high-risk venture. BFIs primarily lack confidence in the projected cash flow of the project due to issues on tariff collection unlike grid connected projects where PPA provides some assurance for regular cash flow into the project. The perceived risks are amplified with community projects because of risks with management and technical knowhow of the community as well as the legal basis of the community groups.

To improved financial viability of mini/micro hydro projects, RERL has been working closely with the Productive Energy Use Component (PEUC) of AEPC to promote MSME. This will help attract private sector actors to develop and operate renewable energy projects.

Progress on Output 3a.1: RERL, UNCDF and CREF carried out a study of a MHP that was funded by a micro finance company in of western Nepal. The 11.5kW MHP is among few projects where household equity provided through a micro finance company. The study found that all the loans were repaid 22 | Page

December, 2017 ANNUAL PROGRESS REPORT within a year of project completion with no defaults. Involving local financial institutions that know the community and are confident about recovering loans in time is a business model, which could address the issues of risks perceived by larger commercial banks. To help reduce lender’s doubts and perceived risks, RERL/SASEC/AEPC has been working with communities of Simrutu, Rukum and Tatopani, Jumla to initiate micro finance activities among beneficiary women.

Progress on Output 3b.1 and 3b.2: Designed and provided technical support for financing platforms and services for promoting commercial financing for domestic manufacturers and mini hydro and large solar PV projects

RERL and UNCDF has jointly established the RE Vendor Challenge Fund at CREF with the main objective of supporting RE vendors to test, develop and scale up innovative business models for vendor finance in Nepal. The fund supports a maximum 50% of the total NPR 19.67 million budget. The CREF has entered into Performance Based Agreement (PBA) with three vendors (Astha Engineering Solution Pvt. Ltd., JBS Urja Pvt. Ltd., and Gham Power Nepal Pvt. Ltd.) selected under stringent procurement process as mentioned in the government approved Vendor Finance Operation Manual. By the end of the project term (i.e. 31 August 2019), the selected grantees are expected to leverage NPR 113.90 million for the installation of 400 Solar Conduction Dryers (SCDs), 200 solar pumps for irrigation and 3,000 units of solar home systems under Pay- As-You-Go (PAYG) model.

Output 3b.4: Created matchmaking platform for mini-hydro and large-scale solar PV developers, financing institutions, and equity investors, and productive end users

RERL and SASEC in partnership with CREF conducted outreach programs to attract commercial credit to mini hydro projects. Interaction programs between communities and interested banks were organized at Giri Khola, Jumla and Phawa Khola, Taplejung. As a result, letter of commitment has been provided by two banks for these projects ensuring financial closure. As a result, Giri Khola MHP has already started construction and contract for equipment supply and construction of Phawa Khola MHP has been awarded.

Progress on Output 3b.5: Functional enterprises adopting productive use of electricity

In order to disseminate information on the benefits of running “MHP as an Enterprise”, RERL organized orientation programs in Rolpa, Rukum and Achham districts.

Moreover, to enhance the institutional capacities of the large-scale micro hydropower projects for commercial operation of the system, RERL worked with AEPC to support beneficiary communities for institutionalization of their organization and helped strengthen their capacities for commercial operation of large scale micro hydropower plants in Achham, Bajura, Baglung, Dolakha, Rukum and Rolpa districts.

RERL has supported 83kW Darna MHP of Achham. The beneficiaries have started selling surplus power to 500 HHs from neighboring Kalagaun VDC. With RERL support, cooperatives have been formed in Darna and Kalagaun VDCs. The two VDCs signed a Power Purchase Agreement to export 25 kW from Darna to Kalagaun. The people of Kalagaun have mobilized equity and grant from WISIONS, Germany and the Kalagaun VDC to construct a 11kV transmission and distribution line. Efficient management and electricity export has more than tripled average monthly revenue of Darna MHP from NPR. 45,000 to NPR. 150,000. Encouraged from this result, RERL has been working with the communities in Achham, Bajura, Rukum, Rolpa and Baglung for commercial operation of 25 MHPs. Towards this, RERL organized orientation and training for 40 MHP managers, including two women, to enhance their skills for commercial operation of the plants. The training included cooperative accounting, commercial tariff setting, computerized billing and productive energy use promotion. As a result, 16 MHPs have already started computerized billing which ensures transparency in tariff setting, billing, collection and account keeping. 23 | Page

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In 2015, RERL designed and fabricated electric lokta boiler to help switch energy source from firewood to electricity. This innovative technology was tried first in Ghandruk, Kaski in western Nepal with power from an AEPC supported MHP. After the technology was proven to be easy to handle and cost effective, electric lokta boilers were bought by 5 lokta entrepreneurs from different parts of the country. RERL then worked on lokta drying technology to reduce dependence on natural sunlight for drying lokta paper during the winter and monsoon seasons when the sky is usually overcast.

Progress on Output 3b.7: Ensured women and marginalized/vulnerable groups own 33% of the functional electricity based enterprises established

So far, RERL has provided Business Management Training to 141 women entrepreneurs. In 2017, RERL organized two training on business management for 51 women entrepreneurs in Biratnagar and Nepalgunj with an objective to impart knowledge on business management, particularly entrepreneurship, book keeping and marketing. Earlier in 2016, an RERL study on the impact of business management training, indicated that the training helped improve entrepreneurs’’ knowledge and capacity on accounting and book- keeping, accessing markets and communication abilities.

Progress towards Outcome 4: Enhanced capacities and skill of various stakeholders in the RE sector

This outcome focuses on enhancing capacities and skills of stakeholders in the RE sector, the trainees are primarily system designers, fabricators, installers and operators. As the service providers are mainly from the private sectors, their capacity building has been actively pursued by AEPC and RERL through classroom and hands-on-training, orientation and study tours.

Progress on Output 4.5: Fully trained, skilled and technically capable people available for operation, maintenance and business management

RERL organized two Micro Hydro Operators’ Trainings at Khamari Khola MHP, Babiyachaur, and Surkhet, benefiting a total of 51 operators of 51 MHPs. Traditionally, operators’ training has been conducted either in Kathmandu or Butwal, which is logistically expensive and more theoretical. Decentralizing training programs has drastically reduced the cost of travel and accommodation while also ensuring more hands-on training and experience sharing through Peer-to-Peer (P2P) Learning.

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December, 2017 ANNUAL PROGRESS REPORT

5.2 Progress on Project Outputs Table 6: Progress on Output Indicators

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Local Government Finalization of RE Subsidy policy Operation Act Local RE Subsidy Policy RE Subsidy revision submitted 2017 Renewable Government Act approved by GON Policy to government Energy in Federal 2017 Context NEA Board NEA Board approved Technical approved Technical Technical Standard Standard for Output 1.1 Standard for NA NA Approved and for interconnection interconnect RE Policy, interconnection of enforced policy of MHP with the ion of MHP GESI MHP with the grid that enables PPP grid sensitive model for mini Documents for Documents for subsidy Guideline hydro and large Power Purchase Utility Scale Solar Power Purchase Policy Rural policy, preparation Power scale solar PV Agreement PV Development Agreement document Energy subsidy Utility Scale Purchase development, between NEA and 2 Guidelines between NEA and 2 on RE is in Policy delivery Solar PV Agreement including fiscal MHP submitted to initiated MHP submitted to place 2006 mechanism Development incentives and NEA NEA and draft sustainability for Draft Technical Technical Standard RE Act possible changes Standard for for interconnection Technical submitted in Nepal interconnection of NA NA of solar PV with Standard to GoN government solar PV with grid grid prepared publication structure prepared Prepared concept Prepared concept Concept documents to documents to documents address energy address energy on energy crisis resulting crisis resulting crisis NA NA from border from border blockade and blockade prepared submitted to the and submitted to GoN the GoN

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Preparation of 2 Municipal plans Municipal Energy Municipal Municipal have been Plan of Gorkha Energy Plan Energy Plan initiated district completed Output 1.2 Support AEPC to District Methodology and develop concept Renewable RERL supported RERL supported database on Best No. of Energy District Rural AEPC to develop AEPC to develop BAT report developed and Available integrated Master Electrification concept on BAT concept on BAT made available for Technology district RE NA Plan Master Plan incorporating (BAT) plans (DREMP) completed for mini hydro and Draft AEPC prepared prepared Act, AEPC large scale solar Support AEPC to for 15 Transition PV systems into prepare AEPC’s role in AEPC’s role in DDCs Paper, AEPC district RE plans document on RE Federal Context Federal Context support in Federal completed completed package for Context Provincial Government Organized Large Scale Solar Workshop on PV Case Study Output 1.3 Enabling Workshop on completed Case Study/ Completed Large Scale Solar Environment Enabling Completion training and PV Case Study for Mini Hydro Environment for Workshop on report and awareness completed in Nepal based Mini Hydro in Enabling workshop programs for 3 case on the Case Nepal organized Environment for proceeding relevant studies study prepared Mini Hydro in government No. of prepared by UNSCAP Nepal organized agencies and trainings NA and 6 1 training on design 1 training on stakeholders on conducted Proceeding trainings of large SPV for NA NA design of large SPV mini-hydro and report conducted DEECCS for DEECCS large-scale solar Minutes of PV systems Preparation for Coordination Preparation for coordination development and NEA and AEPC Exhibition to create meeting Exhibition to create Meeting on productive end Coordination awareness on RE conducted on 22 awareness on RE uses Meeting technologies August 2017 technologies Completion Report

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 1 Training on DFS 1 Training on DFS of Mini Hydro and 1 of Mini Hydro and 1 Training NA NA training on GIS for training on GIS for reports AEPC completed AEPC completed NA Coordination Coordination meeting organized meeting organized and signed MOU NA and signed MOU for MOU for Power Power Purchase Purchase Agreement Agreement NA NA Asia-Pacific Asia-Pacific Meeting on Meeting conducted Training Sustainable on Sustainable Report Energy for LDC Energy for LDC countries countries RERL is supporting Output 2a.1: No. of mini CREF banks for Commissioned hydro 1 mini Financial closure financial closure Bank mini-hydro RERL is supporting Initiate financial demonstrat hydro of Simrutu and Commitment demonstration NA CREF banks for closure of 2 Mini ion projects project Giri Khola / Meeting projects totaling 1 financial closure Hydro Projects Financial closure of commissio initiated completed Minutes MW through PPP Simrutu and Giri ned model Khola completed

Output 2b.1: Guidelines for Financial closure of Detailed Demonstrated developing mini 2 mini hydro Feasibility PPP models hydro under PPP 5 completed Report facilitating model developed DFS of 4 mini No. of institutions Detailed cooperation Initiated financial hydro projects projects strengthen Feasibility between private NA closure of 2 mini- with total capacity strengthen ed Study of Mini Guidelines for sector, public hydro projects (Tap of 2MW ed including Hydro Projects developing mini PPP sector, and local Khola 2,600 HHs completed SPVs hydro under PPP Guidelines organizations and Giri Khola model developed through 2,000) totaling 500 establishment of kW

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Special Purpose Initiated financial Vehicle (SPV) in closure of 2 mini- Institutional three selected hydro projects support for 2 SPVs Bank mini-hydro (Tap Khola 2,600 on-going (Phawa commitment projects (1 MW) HHs and Giri Khola Khola, Tara Khola) 2,000) totaling 500 kW DFS of 9 mini hydro Institutional DFS Report projects with total support for 2 SPVs capacity of 3 MW on-going (Phawa completed Khola, Tara Khola) DFS of 9 mini DFS Report hydro projects with total capacity of 3.4 Institutional MW completed support for 2 SPVs DFS of 4 mini on-going (Phawa hydro projects with Khola, Tara DFS Report total capacity of 2

MW completed

Institutional

support for 2 SPVs Bank on-going (Phawa Commitment Khola, Tara) No. of mini- grid and grid Output 2b.2: connection Interconnection of Demonstrated 1Mini-grid supported - 1 mini-grid 2 MHP in Gulmi financially interconne Installation of Erection of 1 mini-grid commissioned in completed sustainable and cting 10 37 km 11 kV Transmission and Commissioni interconne NA reliable mini-grid MHP with Distribution line ng Report cting 2 benefiting 2,300 transmission connecting ten 300 kW completed MHP with HHs line Erection of (10) micro-hydro capacity capacity of Transmission and systems (300 kW) 218 kW in Distribution line Gulmi completed in completed Taplejung

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 - 1 mini grid Interconnection of interconne 23 kW Grid cting 6 Taplejung Mini Grid Piloting of Grid Sayurebhumi Interconnection of MHPs with Development Commissioni connection of 2 MHP completed 23kW the Functional Group ng Report MHPs and 40 kW Syaurebhumi MHP capacity established. Leguwa Khola is completed 106 kW in on process Baglung revived

- Due

diligence of

1 Mini Grid

interconne Due diligence of cting 8 Due diligence of TMG MHPs with TMG interconnecting 7 the total interconnecting 7 Bid MHPs completed. capacity of MHPs completed. Documents NA Bid document is 900kW Bid document is NA being prepared to completed being prepared to procure equipment and procure equipment

procureme

nt initiated

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017

31.2 kW solar PV systems were installed

41 kW solar PV 72 institutional Systems installed 41 kW solar PV Solar systems Installed 72 Project MIS Systems installed install in public Institutional Solar 8 kW directly by institutions PV System RERL under relief and rehabilitation Large scale solar PV Installed 72 Output 2b.3: systems Solar PV Institutional Solar Demonstrated installed systems PV System financially with with the sustainable and capacity of NA total Installation of 1.5kW solar PV 1.5kW solar PV reliable large scale 500 kW capacity of Solar PV back up system back up system solar PV systems under relief 500 kW Systems at installed in Snake installed in Snake NA Project MIS (500 kW total) and installed Snake Bite Bite Treatment Bite Treatment rehabilitati Treatment Center at Charali Center at Charali on Centers Jhapa Jhapa 3kW Solar PV 3kW Solar PV 8 kW solar PV system installed in system installed in installed directly by Energy for Sahid Chandeshor Sahid Chandeshor Project MIS RERL under relief education Lower Secondary Lower Secondary and rehabilitation School at School at Dhanusha Dhanusha Assisted AEPC to Assisted AEPC to develop business develop business plan for 18 kW NA NA plan for 18 kW Project MIS solar mini grid solar mini grid under 5P under 5P

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Assisted AEPC to Assisted AEPC to initiate initiate institutionalization institutionalization of 15 kW Solar and NA NA of 15 kW Solar and Project MIS 10 kW Wind Hybrid 10 kW Wind system in Hybrid system in Makwanpur Makwanpur Rapid assessment Installation of Rapid assessment of 42 solar pumping Institutional 72 Solar installed of 42 solar systems and solar in earth in earthquake Project MIS pumping systems installation of 72 quake affected affected districts completed solar systems districts completed Total 3.25 MW 1.8 MW electricity MHP Rehabilitation Rehabilitated 30 generated (2.4 MW installed of MHP MHPs with total from new Micro Technical 2 DFS completed Project MIS and damaged by capacity of 682 Hydro + 0.66 MW Output 2b.4: assistance rehabilitate earthquake kW from rehabilitated Operationalized 2 for large d MHP + 0.19 MW MW of off-grid micro from solar PV) large micro-hydro hydro 25,000 3,581 new 3,581 new (over 60 kW) systems households households (RERL households (RERL power projects and TA and Previou NA NA Project MIS have access and NRREP) have and NRREP) have demonstrating financial sly to energy access to electricity access to electricity cost-advantage, assistance installe Rapid assessment feasibility, to d MHPs Rapid assessment of 140 MHPs productive end- rehabilitate of 140 MHPs affected by uses, and best MHPs affected by earthquakes practice through damaged earthquakes completed. technical by completed. USD NA NA Project MIS assistance earthquake 176,493 for USD 176,493 for s rehabilitation of 31 rehabilitation of 31 MHPs, 755 kW, MHPs, 755 kW, 7,500 HHs for 7,500 HHs for immediate immediate

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 rehabilitation rehabilitation transferred to DEF transferred to DEF NA Support AEPC to Support AEPC to TA for MHP establish 25 MHP establish 25 MHP Project MIS installation with total capacity with total capacity of 1229kW of 1229kW Output 2b.5: Completed financial closure of 7 MW of off- grid mini-hydro DFS of 5 Mini Hydro power projects Complete replicating PPP Under benefiting more model through DFS of 1 DFS of 5 Mini Construction of construction of 5 than 5,000 HHs establishment of DFS of mini MW mini Hydro Complete Bid NA mini hydro mini hydro 5 mini hydro SPVs, hydro hydro benefiting more document projects projects with total projects with total demonstrating completed than 5,000 HHs capacity of 1.5MW capacity of 1.5MW cost-advantage, is under feasibility, construction productive end- uses, and best practice through technical assistance Output 3a.1: Established a financing instrument to Establishment Financing Financing Financing incentivize of financing instrument instrument Financial instrument Banking and NA NA NA instrument for prepared and prepared and Instrument/ established Financing developer and establishment establishment Report

Institutions for manufacturer process on going process on going financing domestic manufacture

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Output 3a.2: Demonstration Established a of several financing financial instrument to instrument such incentivize as Soft Credit, TOR for credit TOR for credit Banking and Credit financing has financing has been AEPC NA NA NA Financing Guarantee, been published in published in AEPC Website Institutions to Vendor AEPC website. website. commercial Financing, LFI financing for mini Financing & hydro and solar Project PV Insurance Output 3b.1: Designed and provided technical 1 gap support for Design of analysis Gap analysis financing financial Consultant has conducted conducted and platforms and package for Gap analysis CREF Business been hired to Inception NA and 1 development of services for domestic completed plan prepared initiate the Report financial business plan promoting manufactur business plan instrument ongoing commercial ers developed financing for domestic manufacturers Output 3b.2: Gap analysis Gap analysis Finalization of 2 Designed and completed along report, Design of Gap analysis financial provided technical 2 Partial Credit with Financial Financial commercial completed. instruments support for instrument Guarantee instruments. instruments, financing NA Financial (Partial Credit financing s instrument Partial Credit Partial credit instrument instruments being Guarantee and platforms and developed completed Guarantee Guarantee s developed. Vendor services for instrument instrument Financing) promoting completed

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 commercial Credit guarantee financing for mini- mechanism for 5 PVPS are hydro and large- household scale PV supported in scale solar PV Vendor Vendor financing pumping systems . projects financing instrument CREF/Compl (PVPS)established Vendor financing instrument implemented in etion report at CREF. Under this instrument implemented Chitwan activity, 5 PVPS are implemented in supported in Chitwan Chitwan district. NA CREF, with RERL support, has The concept of the established project insurance Mini Hydro innovative financial for Mini Hydro debt/project instruments such as CREF Debt developed insurance soft credit, credit Report and integrated develop guarantee and into CREF’s insurance to reduce modality the risks of BFIs to invest in RE projects Training materials Training materials prepared & prepared & The training orientation for orientation for materials bank officials bank officials Training Output 3b.3: prepared and organized. 15 organized, 15 bank Report Developed training bank officials officials training materials No. of conducted 1 training The training participated in the participated in the on mini-hydro and training NA material material is being training training large-scale solar materials prepared prepared RERL, UNCDF and PV projects for for bankers RERL, UNCDF and CREF jointly financing CREF jointly carried out a institutions carried out a study Training NA study on Micro on Micro Financing Report Financing of of 12kW MHP in 12kW MHP in Myagdi Myagdi

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Study on Micro Study on Micro Financing Study Report Finance completed NA Output 3b.4: Created matchmaking platform for mini- Investor’s Forum Investor’s Forum No. of 1 event Organize Investor’s Forum hydro and large- could not be organized and 2 platforms organized Investor’s organized and 2 Photos and scale solar PV organized as mini hydro created for NA and 1 Forum as mini hydro projects Participants’ developers, scheduled due to projects pitched matchmaki website postponed in pitched for private list financing continuous strike for private ng developed 2015 investment institutions, and and blockade investment equity investors, and productive end users

657 MSMEs were established by 657 MSME were PEUC/NRREP, established by Provide RERL provided PEUC/NRREP, NRREP Technical 525 MSME direct technical Report/ RERL provided Target:300 Assistance to established assistance to Project MIS direct technical install MSME establish193 Output 3b.5: assistance to No. of MSMEs Functional establish193 productive enterprises use of NA 525 MSME adopting electricity established productive use of supported Business electricity Opportunity Business Assessment in Opportunity RERL provided Tanahun, Achham 1300 new Assessment in 1300 new Technical Report/ and Makwanpur MSMEs Tanahun, Achham MSMEs Assistance to Project MIS carried out and Makwanpur install 1182 MSME

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Assistance to install 1182 MSME MHP as an Management Management 2800 MHP as an enterprise improvement for improvement for Report/ MSMEs enterprise model model in Darna, commercial commercial Project MIS upgraded developed Achham operation of MHP operation of MHP 2 innovative technologies for fuel switching from 2 innovative firewood to technologies for electricity fuel switching from developed and firewood to tested (Khuwa electricity Initiated 4 electric Lokta Making, Lokta developed and efficiency boiler technology Boiling), 1 Report/ tested (Khuwa improvement of fabricated and technology under Project MIS Making, Lokta electric Lokta promoted at development Boiling), 1 boiler community level (Nettle Leaves technology under Drying) development (Nettle Leaves 4 electric Lokta Drying) boiler technology fabricated and promoted at community level Framework for Framework for Enhance development of development of institutional industrial cluster industrial cluster capacity of Cooperative have prepared. 2 prepared. 2 Darna MHP, been formed in Report/ potential rural potential rural Achham for Darna, Achham in Project MIS industrial clusters industrial clusters commercial 2016 identified. Field identified. Field operation of the work on-going in 1 work completed system cluster in Achham

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Cooperative have been formed in Darna, Achham 9 lift irrigation projects studied. 2 lift irrigation projects (benefitting 45 HH) constructed with 9 lift irrigation 5 lift irrigation EDM funding and 3 Lift irrigation projects studied. 2 install with under construction. installed in lift irrigation EDM funding Business Chiuritar, projects Opportunity , Apchaur, Report/ (benefitting 45 Assessment in Jarung and Project MIS HHs) constructed Tanahun, Achham Chotesh VDC in with EDM funding and Makwanpur Dhading and 3 under carried out

construction. Lift irrigation installed in Chiuritar, Simthali, Apchaur, Jarung and Chotesh VDC in Dhading Draft MoU between AEPC and Draft MoU between Department of Commercial AEPC and Irrigation to Operation of 25 Department of Commercial develop lift Micro Hydro in Report/ Irrigation to Operation of irrigation projects Dolakha, Baglung, Project MIS develop lift Micro Hydro prepared. Achham, Bajura, irrigation projects Commercial Rolpa & Rukum prepared. Operation of 25 Micro Hydro in Dolakha, Baglung,

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Achham, Bajura, Rolpa & Rukum

- Locally Locally developed Report/ developed pre-paid NA NA pre-paid meter Project MIS meter

- Energy Energy consumption NA consumption Report/ NA pattern of MHPs pattern of MHPs Project MIS being studied. being studied.

Support to innovative Lokta Dryer Lokta Dryer technologies for Report/ installed in installed in fuel switching Project MIS Ghandruk Ghandruk from firewood to electricity Value Chain for Value Chain for Telkuwa Solar Telkuwa Solar Irrigation Micro Finance No. of Draft report Draft report Output 3b.6: Institutional Draft report training submitted prepared Operationalized mapping and 2 training mechanism to orientation orientation Concept note Support promote financial NA s to women s prepared Baglung mini Concept products for and conducted grid cooperative Training on co- note; entrepreneurs/en marginalize to work as MFI operative Training d users d groups to promote end- strengthening report use conducted

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Co-operative Co-operative strengthening & strengthening & Co-operative Micro Finance Micro Finance for strengthening & Report for Simrutu Simrutu Khola Micro Finance for Khola Mini Mini Hydro Simrutu Khola Mini Hydro initiated completed Hydro completed 43 women from Eastern and Western Development Impact study of Impact study of Impact study of Regions were PEU on women PEU on women Study report PEU on women provided completed completed enterprise management training. 74 women and 80 men benefitted Output 3b.7: 74 women and 80 No. of from skill based Ensured women men benefitted Business training training on and marginalized/ from skill based management 51 women trained and 2 training tailoring, computer Training vulnerable groups training on training for on business orientation orientation education and Reports own 33% of the NA tailoring, computer marginalized management s to women s bakery while 51 functional education and women and conducted women trained on electricity based bakery. marginalize business enterprises d groups management established Orientation for commercial operation and 25 participants 25 participants institutional trained on trained from NA strengthening commercial commercial Training to selected operation and operation and Report micro hydro institutional institutional power plant strengthening strengthening management committee in Baglung

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 NA 55 participants 55 participants Cooperative trained on trained on management Training cooperative cooperative training for Report management of management of micro hydro micro hydro micro hydro 1 gap analysis on NA NA 1 gap analysis on Gap analysis manufacturing of manufacturing of report mini hydro mini hydro components in the components in the Output 4.1: country completed. country completed. Created a 2 monitoring and 2 monitoring and knowledge base of 1 gap quality assurance quality assurance technical analysis, 1 mechanism for mechanism for challenges and NA NA monitoring mini/micro hydro mini/micro hydro opportunities in No. of system, 2 and solar PV and solar PV the design, monitoring quality developed. developed. manufacture (for and quality assurance Sustainability Sustainability micro-hydro (+60 assurance NA mechanism framework tested framework tested kW) and mini- mechanism , 1 and 1 workshop and 1 workshop hydro), and framework organized to organized to installation and framework developed, finalize it. Piloting finalize it. Piloting after-sales service and 1 on 10 MHPs on 10 MHPs in micro-hydro workshop initiated. initiated. (60+ kW), mini- conducted 3 Remote hydro and large 3 Remote Remote monitoring Monitoring scale solar PV Installation of 3 Monitoring Installed site system for large Systems systems Remote Systems completed and Solar PV developed. completed in Monitoring in Sindhuli, completion Sindhuli, Systems Okhaldhunga and report Okhaldhunga and Kathmandu Kathmandu

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 Power Output Verification Guidelines of AEPC updated 66 engineers 66 engineers and POV for trained on field trained on field Training mini hydro level monitoring level monitoring Report included. system system Training for engineers initiated Remote Remote Remote monitoring monitoring monitoring system for solar PV Software system for solar system for solar developed PV PV developed 1 training on design Preparation of POV Output 4.2: Fully of mini hydro Power Output POV Guideline POV Guideline Guideline trained, skilled completed. 25 Verification prepared and 25 prepared and 50 No. of and Training and technically engineers were (POV) Guideline engineers trained engineers trained training report capable people trained. and training and available for 10 engineers from manuals 4 training project solar equipment for and 2 10 engineers from identification, NA vendors were developing manuals solar equipment feasibility studies trained on Training skilled and prepared vendors were Orientation to and detailed Orientation to 11 designing large and technically trained on PVPS design of mini- PVPS Technicians solar PV orientation capable designing large Technicians hydro and large- installations while reports people solar PV scale solar PV 11 PVPS installations. systems technicians oriented Output 4.3: Fully Digital ELC for Old trained, skilled 2 ELC, 2 Digital ELC for Implementation micro hydro No. of new ELC, and technically DLC and 1 micro hydro of digital ELC on developed and technologie DLC, Procurement capable mini turbine developed and piloting of grid tested in the Reports s for mini and process ongoing hydro technology tested in the connection of laboratory hydro Turbin manufacturers in designed laboratory. MHP Procurement e identified areas process to

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 and their after- implement digital sales services ELC ongoing Training on Training on installation of large installation of large micro hydropower micro hydropower Training plants with 20 plants with 20 Report Output 4.4: Fully participants participants trained and conducted. NA NA conducted. technically Training manual for Training manual capable No. of design and for design and construction and training for installation of large installation of large Manual installation teams installation 1 training NA solar PV systems is solar PV systems is within companies of large conducted being prepared. being prepared. to improve quality micro 30 technicians 30 technicians of installed mini- hydro House Wiring trained on house trained on house Training hydro projects NA Training wiring at Rukum wiring at Rukum Report and large solar PV and Biratnagar and Biratnagar system Refresher 63 micro hydro 63 micro hydro training on operators trained operators trained Training NA micro hydro on operation of on operation of Report operators micro hydro micro hydro 29 micro hydro 29 micro hydro Conduct micro Output 4.5: Fully operators trained operators trained Training hydro operator trained, skilled on management on management Report No. of training and technically and operation and operation people capable people 60 people 17 micro hydro 17 micro hydro trained in Conduct O&M available for trained and operators trained operators trained Training mini hydro, training for EQ operation, 3 trainings on management on management Report large micro NA NA affected MHP maintenance and conducted and operation and operation hydro and business on RE as Conduct 29 women large scale 29 women management of business training on entrepreneurs solar PV entrepreneurs mini-hydro business trained on Training system trained on business projects and large management business Report management scale solar PV for Mini-hydro management training and large-scale training

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December, 2017 ANNUAL PROGRESS REPORT

Cumulativ Cumulative Output Output Baseli e Target Progress up to 2017 2017 Means of progress up to statement indicator ne for 2013 - 2016 Milestone Progress verification 2017 2017 solar PV systems

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6. BUDGET AND EXPENDITURE

The following table shows the output wise indicative budget and expenditure for 2017 and the sources of funds budgeted and utilized.

Table 8: Output wise annual budget and corresponding expenditure Amount in US$ Output Annual Annual Expenditure Annual Expenditure Total Budget Budget through project through UNDP Expenditure Utilization%

Output 1.1 56,050 46,641 0 46,641 83% Output 1.2 8,600 8,167 0 8,167 95% Output 1.3 6,800 6,747 4,000 6,747 99% Output 2b.1 506,100 503,547 9,550 513,097 103% Output 2b.2 49,000 49,034 0 49,034 100% Output 2b.3 217,235 112,453 94,871 207,324 96% Output 2b.4 40,500 39,669 0 39,669 98% Output 2b.5 20,500 20,400 0 20,400 100% Output 3b.1 21,500 21,140 0 21,140 98% Output 3b.3 500 456 0 456 91% Output 3b.5 45,300 36,189 0 36,189 80% Output 3b.7 11,000 11,853 0 11,853 108% Output 4.1 3,150 2,975 0 2,975 94% Output 4.2 7,200 7,005 0 7,005 97% Output 4.3 2,000 1,897 0 1,897 95% Output 4.4 9,200 9,193 0 9,193 100% Output 4.5 42,000 40,796 0 40,796 97% SEforALL 71,035 44,319 17,362 61,681 Program support 203,850 133,687 58,645 192,332 99% Total 1,321,520 1,096,168 184,428 1,276,596 97%

Table 9: Sources of funds Budget and Utilization of the project period

Funding Expenditure Total Total period up to 2014 Expenditure Expenditure in Expenditure in Total Budget Budget Balance ` Project expenditure till (Start – up to 2015 2016 2017 utilization % US$ Budget 2017 End Date) July 2014 – 66,946 UNDP 2,000,000 355,601 297,054 796,624 1,516,225 73% 1,280,573 Dec 2019 Donor 1 July 2014 – 144,846 3,000,000 737,836 1,325,606 420,502 2,628,790 88% 793,395 GEF Dec 2019 Donor 2 Jan 2015 – 0 99,269 99,269 0 0 99,269 100% 0 Korean June 2016 Donor 3: 0 Dec 2015 – Norwegian 378,000 0 79,043 59,470 138,513 37% 298,785 Dec 2017 (SEforALL) 211,792 Total 5,477,269 1,192,706 1,701,703 1,276,596 4,382,797 298,785

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Table 10: M&E Expenditure

Total spent on Monitoring

Costs associated with UNDP/project staff, consultants, project partners, supporting national statistical systems in designing Total cost spent on project staff project specific data collection methodologies (qualitative and monitoring visit in different and quantitative), monitoring methods including stakeholder project areas = USD 76,403 surveys and other qualitative methods, collection of data, analysis and dissemination of the findings to inform a project, either with project partners or to fulfill specific UNDP/project requirements (preferably the former). Total spent on Decentralized Evaluations USD 5,670 spend for implementation, upgrading and Costs associated in designing, implementing and evaluation for the project disseminating evaluations for specific projects activities

Combined total spent on M&E USD 82,073

Narrative on Progress related to Budget and Expenditure

In 2017, RERL allocated USD 1,250,485 (excluding SE4ALL activities) to carry out various activities of which USD 800,000 was from UNDP’s TRAC fund and USD 450,485 from GEF fund. This year RERL utilized 97% of total budget.

7. CROSS CUTTING ISSUES

7.1 Targeting and voice/ Participation of Target groups

The main target groups of RERL support are people living in off grid areas. All RERL activities are related to promotion of larger renewable energy systems for provision of modern energy in such areas through enabling environment for participation of the private sector in project development. Further, at the operational level, RERL has helped AEPC to prepare GESI sensitive Special Purpose Vehicle (SPV) formation guidelines, which ensures equal participation of women and marginalized groups in decision making. The revised RE Subsidy Policy and Delivery Mechanism provides additional financial assistance to vulnerable and disadvantaged groups, people livening in remote locations and women headed households.

7.2 Gender Equality, Women’s Empowerment, and Social Inclusion

Towards achieving the national goal of building an equitable and gender inclusive society by ensuring equal rights to women and men of all castes, creed and regions in the social, political and economic aspects of national development, AEPC has been promoting GESI sensitive renewable energy projects and productive end-use applications. The revised subsidy policy and delivery mechanism provide additional financial assistance to single women headed and other disadvantaged households. RERL has been supporting AEPC to mainstream Gender and Social inclusion (GESI) in RE projects, particularly mini hydro, large micro hydro and solar PV systems to benefit marginalized groups with access to electricity and income generating activities. RERL has been working with extremely marginalized Chepang community in to support them with access to electricity from solar PV systems. Likewise,

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RERL is currently working with Chepang community in Makwanpur district to install solar pumping systems under the Public Private Partnership modality. RERL has provided trainings to 141 women entrepreneurs on Business Management to build knowledge on business management, particularly on entrepreneurship, bookkeeping and marketing of products.

RERL has also been working on modification/adaptation and field testing of productive use technologies to fit the rural context for marginalized population. In 2017, Lokta Dryer was fabricated and installed. This technology helps reduce dependence on natural sunlight for drying lokta paper which is unpredictable during the winter and monsoon seasons.

7.3 National Capacity Development

RERL has been working mainly on capacity development of AEPC to develop plans, implementation modalities and implementation management of their respective components. The project has been supporting AEPC to promote less disseminated, yet highly feasible, renewable energy technologies like mini hydro, large micro hydro and large scale solar PV and productive energy uses. In 2017, RERL supported AEPC to draft roles and responsibilities of different levels of government related to alternative and renewable energy and small hydro. This has been reflected in the recently promulgated Local Government Operations Act 2017.

Besides AEPC, RERL has also been working with relevant governmental agencies to promote less disseminated RE technologies like mini hydro and large solar PV. AEPC, NEA and DoED have jointly been developing design guidelines for grid connected of megawatt scale solar PV systems with key inputs from RERL.

RERL is essentially a national capacity development project aimed to provide required capacity for NPC and relevant government stakeholders to implement and realize SEforALL objectives in the national development agenda. It targets to enhance multi-stakeholder efforts to bring synergistic activities to achieve the common goal. Energy has been the core to the development efforts of Nepal and the government has expressed its commitment for this initiative as well as SDG 7.

The project supported Nepal to participate in COP 23 held in Bonn, Germany. One of the major outcomes of this event is the decision by the least developed countries (LDCs) to institutionalize Renewable Energy and Energy Efficiency Initiative (REEEI) to meet SDG 7 targets.

7.4 Sustainability

The project has been strengthening legal, institutional and policy environment to support renewable energy and other low-carbon technology development and utilization through formulation of policy, planning and information dissemination that would create an enabling environment especially for promotion of mini hydro and solar mini grid systems. In terms of enhancing renewable energy financing, RERL has been working closely with Central Renewable Energy Fund (CREF) to establish different financial instruments to attract private investment in larger RE projects. The project has been aligned with AEPC’s mandate, objectives and activities. A detailed study was conducted on BFIs investments in RE in general and rural areas for access to electricity which recommended various instruments including establishment of SPV under the Public Private Partnership (PPP) model involving the private sector, local government and community organizations for building, operating and managing demonstration projects. Financial Instruments such as soft credit, credit guarantee, vendor financing, project insurance, among others were also recommended by the study. RERL initiated establishment of vendor financing mechanism at a small scale for promoting household level solar irrigation and worked jointly with UNCDF to prepare Vendor Financing Manual for scaling up. To make 46 | Page

sure that CREF is fully operational, RERL and UNCDF have been supporting the preparation of its business plan spelling out its area of operation and resources required. It is envisaged that these activities will support to remove existing barriers to project financing from the private sector and inject more credit into projects thus moving from a subsidy driven RE promotion to a more market driven approach ensuring financial sustainability of the promoted systems, which will ultimately enhance the livelihood opportunities and options for local communities. The project will ensure that a number of micro, small and medium enterprises (MSME) are functional in the RE project areas and consume substantial amount of electricity which also contributes to financial sustainability of RE projects with affirmative interventions to promote women’s organizations and women-led business to have access to finance for operating MSMEs. To develop the capacity within the country for larger solar PV and mini hydropower projects, RERL has been supporting private companies, consultants, engineers and technicians with skill training and established guidelines to ensure at least 33% participation were women, marginalized and people from vulnerable communities. So far, 93 engineers, of which 8 women, were trained on large scale Solar PV for grid connection, Power Output Verification of mini/micro hydro, MHP operation and management, and RE financing.

7.5 South-South and Triangular Cooperation

Hydro Power Empowerment Network (HPNET) is a forum mainly of practitioners, hydropower policy makers and hydropower regulators of South Asia and South-East Asia. RERL has been engaged with HPNET for more than 2 years in several activities and has prepared Frequently Asked Questions (FAQ) to be published on the HPNET website focusing on various misconception to grid connection of MHP.

Regional meeting on Sustainable Energy for Asia-Pacific LDC countries was jointly organized by the UN Office of the High Representative for LDCs, LLDCs and SIDS (UN-OHRLLS) and the Government of Nepal, with support from UNDP Nepal Country Office on 22 and 23 March 2017 in Kathmandu. The SEforALL team provided substantial inputs in preparation and organization of this meeting. The Regional Meeting was aimed at building national leadership on energy sector and creating stronger multi-stakeholder partnerships to improve access to finance. The SEforALL implementation agenda, SDG 7 implementation process, project development and financing, and open discussion among key stakeholders were the major highlights of the program. The workshop brought together key stakeholders in the energy sectors from Asia Pacific LDC countries, international organizations and the private sectors to share knowledge and experiences and disseminate best practices from around the region.

7.6 Partnerships

The World Bank: Alternative Energy Promotion Centre (AEPC) has been implementing the World Bank funded Renewable Energy Component of Kabeli Transmission Project in Taplejung, with additional technical assistance from RERL. This includes installation of 900 kW mini grid project interconnecting 8 MHP. The mini grid, once completed will provide electricity to the district headquarters benefiting over 2000 households.

UNESCAP: Under Pro-Poor Public Private Partnership (5p) Modality, 18 kW Baidi Solar Micro Grid has been installed in Dubung, Tanahun benefiting 140 households. This project is the first one in Nepal developed by a SPV, and owned by beneficiary community and a private company. RERL has helped the SPV to prepare business plans of 20 enterprises. In addition, RERL has also been supporting AEPC to promote Solar PV based water supply systems in Raksirang VDC of Makawanpur district under the 5P project by leveraging UNESCAP financial assistance.

UNEP/ Practical Action Consulting Ltd.: With technical assistance from AEPC/ RERL and financial assistance from UNEP, Practical Action Consulting Ltd. carried out a case study of mini/ small hydropower

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(both off- and on-grid) in Nepal to support AEPC in formulating policies and implementating a framework to promote mini hydro projects in Nepal. The case study documents and shares experiences of different business models for both ‘on and off-grid’ mini hydro development; and explores roles of various enablers and stakeholders to create an enabling environment.

UNDP/Norway: RERL has been assisting UNDP to implement SE4ALL activities in Nepal. Government of Norway has provided financial assistance to carry out different activities under SE4ALL. So far, Country Action Plan has been prepared and shared with different stakeholders.

UNCDF: RERL and Clean Start of UNCDF have been supporting CREF to prepare its Business Plan that will help to chart the way forward. Likewise, RERL and UNCDF are preparing Vendor Financing Manual to promote small RE systems through private sector involvement. In 2017, RERL and UNCDF supported CREF to establish Vendor Financing Challenge Fund. The Fund has already called for proposals from interested private companies.

7.7 Promotion of civic engagement

At the field level, RERL has directly been working with beneficiaries following the much-acclaimed REDP’s community empowerment model - where the community provided close and consistent support to build their capacity and to engage in all aspects of service delivery ranging from project identification, planning, implementation, management, operation and monitoring.

RERL has been supporting municipalities to prepare municipal energy plans in participatory approach, engaging individuals, elected officials, civil society, private sectors, governmental line agencies and donors.

7.8 Expanding opportunities for youth

Access to electricity in rural areas brings opportunities to establish various types of enterprises. RERL has been supporting Productive Energy Use Component (PEUC) of AEPC to promote end use activities, which typically attract young men and women interested in starting their own business. Poultry, carpentry, metal shop, bakery, communication centers and agro-processing mills are the most popular enterprises in rural areas.

In 2017, the Hult Prize Challenge provided the opportunity to host a local Hult Prize event on campus allowing the winning team to fast track their ideas through regional finals of the competition. The challenge for Hult Prize was to build a scalable, sustainable enterprise that harnesses the power of energy to transform the lives of 10 million people by 2025. RERL supported three Hult Prize Events in Pokhara University, School of Management, Tribhuvan University and Institute of Engineering, Pulchowk Campus.

Moreover, RERL has been providing internship opportunities to young professionals to be involved in renewable energy related activities. In 2017, one female engineer worked with RERL to finalize technical guidelines and collection of household information on energy consumption.

7.9 Innovation

RERL has been at the forefront in innovating technologies as well as approaches for promotion of renewable energy in Nepal. This includes removing barriers for promotion of large scale RE systems such as mini hydro and large solar PV projects. RERL has also been supporting AEPC for sustainable operation of micro hydropower projects. In this regard, RERL has come up with the concept of ‘Renewable Energy for Enterprise Promotion and Renewable Energy Promotion as an Enterprise’. The main concept was to look at RE projects

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not only as social infrastructures but also as profit making assets. RERL has been piloting MHP as an enterprise concept in several MHPs by strengthening the institutional capacities, exploring opportunities for optimum utilization of electricity and building positive incentives in management processes.

RERL has also been working on adaptation or modification of technologies to fit the rural context. These productive end use technologies help fuel switching from traditional biomass to electricity. These technologies have been under field testing for wider dissemination among stakeholders.

To promote the use of information and communication technologies (ICT) in all aspects of renewable energy development, RERL has been working with young innovators in Nepal to develop mobile phone applications. RERL developed both Android and iOS based Nepal Solar Calculator that allowed calculation of solar power required and information on costs, subsidy and nearest vendors. In 2016, in collaboration with International Centre for Mountain Development (ICIMOD), smart phone applications for field survey of mini grid projects (micro hydro and solar), calculation of area for rooftop solar PV installation and remote monitoring of solar PV systems were developed. These applications will be used in project identification and pre-feasibility studies.

7.10 Knowledge Management and Products

• Local Government Operations Act 2017 • Methodology for Municipal Energy Plan • Renewable Energy Survey Tool (REST) • Documentary on Snake Bite Treatment Center • http://www.aepc.gov.np • http://np.undp.org/RERL • http://www.undp.org • http://kathmandupost.ekantipur.com/news/2016-11-04/puffs-of-hope.html • http://epaper.thehimalayantimes.com/index.php?pagedate=2017-5- 28&edcode=71&subcode=71&mod=1&pgnum=2 • http://reliefweb.int/report/nepal/united-nations-nepal-news-insight-may-jun-2017-vol-64 • http://nagarikplus.nagariknews.com/epaper/src/epaper.php?id=3072#page/20 • http://peeda.net/downloads/energy-insight-a-yearly-publication-of-peeda-volume-iii-2016/

8. LESSONS LEARNED

As private developers have very limited space to work in small-scale renewable energy systems in Nepal, there is a general lack of knowledge and experience among both the government and the private sector. As a pilot, two projects were completed by AEPC recently, in which, private companies partnered with rural communities in Tanahun and Khotang to establish Special Purpose Vehicle and develop solar mini grids. These systems connected 223 communities with electricity. Further, RERL partnered with Winrock International to promote household size solar irrigation systems in Chitwan district. All these experiences indicate that there are entrepreneurs willing to invest in RE given an enabling and favorable climate. Private sector attracted to technologies and systems that have strong returns on investment and are scalable. To encourage private investment, projects should be carefully selected, financing arrangements should be properly designed and bureaucratic red-tapism must be reduced. There is ample evidence that some private companies are willing to take reasonable risks to promote their technologies.

Frequent changes in NPC and its secretariat staff have affected the work progress of SEforALL. Assignment of designated focal person for SEforALL would help alleviate the human resource gaps.

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9. IMPLEMENTATION ISSUES AND CHALLENGES

• Reluctance of BFIs in providing credit: Banks and Financing Institutions (BFIs) in Nepal are risk averse and do not want to invest in renewable energy systems in rural areas, particularly those owned and managed by a community. An RERL study identified reasons for their risk averseness and recommended several financial instruments to attract BFI in rural energy investment. RERL has been working with CREF to develop and establish financing instruments such as soft credit, credit guarantee, vendor financing, and project insurance among others, to attract BFI’s investment in renewable energy systems in rural areas.

• Delay in approval of subsidy and delivery mechanism: Revision of RE Subsidy Policy took more time than expected due to frequent changes in government. This delay has affected financial closure of RERL supported projects and thus implementation. As the government has recently approved both the policy and its delivery mechanism, it is expected that project implementation in 2017 will be faster than in 2016.

• CREF not fully operational: Credit facilities are necessary to attract private investment and achieve timely financial closure of larger projects like mini hydro. Lack of available credit with CREF has also hampered on time financial closure. AEPC is forwarding credit facility to CREF from ADB funded SASEC to promote mini hydro and solar mini grids. This will help in achieving financial closure of RERL supported projects too.

• Adoption of PEU in RE Projects: Reliability and quality electricity supply were few of the major reasons for reluctance of rural entrepreneurs to invest in productive energy use enterprises in RE projects. Further, lack of professional management of community owned RE systems and limited market in rural areas for local products have also been cited as reasons for low investment. RERL has been working with PEUC of AEPC to realize the concept of energy as an enterprise as well as for enterprises. For example, the 83 kW Darna MHP, Achham is operated as an enterprise and will export power to neighboring Kala Gaun VDC which does not have resources of its own to produce electricity. It is expected that with extensive support on awareness, capacity enhancement and transparent governance, most of the MHPs supported by AEPC could be encouraged towards commercial operation.

• SEforAll: SEforALL project personnel have not been able to be physically present at NPC due to lack of office space, after NPC Secretariat building was severely damaged in 2015. After the earthquake, NPC’s priorities focused on recovery and reconstruction, which has affected SEforALL activities. Similarly, frequent changes in NPC leadership and alterations in responsibilities of officials have affected implementation of SEforALL capacity building project activities. In spite of the challenges, a draft Country Action Agenda has been prepared and shared with stakeholders.

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10. PRIORITIES FOR 2018

• Renewable energy in Federal structure - Capacity Development of Local and Provincial Governments - Preparation of Municipal Energy Plan - Preparation of Draft AEPC Act and Transitional Plan • Demonstration Projects - 1.5MW Mini Hydro Demonstration Project - Taplejung Mini Grid - Grid Connection of Leguwa Khola & Chimal MHPs - KfW funded PVPS & SASEC funded Solar Mini Grid • Operationalization of RE Financing Instruments - Financial Closure of Mini Hydro Projects o Phawa Khola o Lower Bom Khola o Khtayad Khola o Patrasi Khola • Commercial Operation of MHPs - Demand Side Management – Pre-Paid & Smart Meter installation - Institutional Strengthening - Business Management Training - Computerized Billing System - Decentralized MHP Operator & Manager Training • GESI - Electric cooking, water & space heating – field testing - Skill training for women and marginalized entrepreneurs • Mini Hydro Management Training • Training for Private Sector on Mini Hydro Project Design, Installation and After Sales Services

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11. A SPECIFIC STORY

Mr. Poorna Gurung, resident of Gandruk, Kaski, Central Nepal, was inspired to start a business utilizing the lokta plant, daphne, which is abundantly available in the local area. Lokta plant grows at an altitude between 1600 and 4000 meters in the hills of Nepal. The evergreen shrub is used to make handmade paper. In 2002, Mr. Gurung set up a factory in his family field by investing NPR 400,000.

After the lokta bark is cleaned with a knife, it is soaked in water for five hours. Then, it is cooked in a solution of hot water and soda for three hours. A beater machine turns the fiber into pulp slurry, which is then poured into wooden frames. After a few minutes of soaking and shaking in the vat, the frame is placed under the sun to dry to make paper, which is a prized item as it is durable, resistant to insects and moths, and non-perishable. It is for this reason that for centuries, lokta paper has been used for record-keeping in government offices across Nepal.

Nowadays, however, the paper has been used for making different products, including prayer flags, restaurant menus, wallpapers, certificates, traditional incense wicks, cards and binding books. For years, Gurung had used firewood to boil the raw material. It was not only cumbersome, but also detrimental to the environment. “It was expensive in many ways. I had to spend NPR 2,000 on firewood, which needed to be chopped into smaller pieces. And while cooking, one had to constantly blow air into the hearth,” he recalled.

With support from the Alternative Energy Promotion Centre (AEPC), Mr. Gurung bought a beater machine and an electric lokta boiler, which was locally fabricated with AEPC funding. He received NPR 78,750 as a subsidy from AEPC and the 50-kilowatt Bhurgyu Khola Micro Hydropower Project, which started generating electricity three years ago, electrified his factory. The electric boiler has not only replaced firewood but has also reduced boiling time by almost half, making the work more efficient.

A group of five local Dalit women, most of them single mothers, is Gurung’s reliable and skilled workforce. Among them is Ms. Sita Bishwakarma, who has proven to be a great manager, overseeing the entire production processes. Ms. Bishwakarma, who earns a monthly salary of NPR 7,000, says the money is enough to support her family of three, including her children’s education. “We used to work the field and it was very hard to survive with what we earned. This is far better,” she says.

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12. RISK AND ISSUE LOGS

Table 11: Risk and Issue Log Matrix

S.N Description Category (financial, Likelihood of Impact Risk Mitigation measures Date risk is Last Status . political, operational, risk (scale of 1 (scale of 1 to 5 factor if risk occurs Identified Updated organizational, to 5 with 5 being with 5 being (A x B) environmental, the most likely) the highest regulatory, security, A impact) strategic, other) B 1 The new Political and 3 5 15 RERL is actively October December Local Constitution Regulatory working with AEPC and 2015 2017 Government of Nepal other governmental Operation Act agencies to define roles 2015 envisages 7 and responsibilities of Methodology provinces institutions at different of Municipal and 744 levels of governance Energy Plan municipalitie viz. municipalities, s in the provinces and federal. country. RE In this regard, instead is the of preparing 15 DEMP, responsibilit RERL will work with y of the municipalities to municipalitie prepare 15 MEMP. s. In this However, due to the context, municipal elections, AEPC’s role they are yet to be fully related to RE operational. This will projects delay RERL activities at development the local level. RERL and has been supporting implementati recently elected on is still municipal personnel to unclear. understand RE development in Nepal and their roles and responsibilities.

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2 This has Financial 5 5 25 Although RERL 14 14 • Delay in delayed supported CREF to October October financial financial design and establish 2017 2017 closure of mini closure and new financial tools hydro projects consequently such as soft credit, project credit guarantee, development. vendor financing, etc., To overcome credit flow for this situation, demonstration projects AEPC have not been recently forthcoming as decided to expected, only one mini broaden its hydropower project banking has achieved financial partners closure. It has been beyond its found that the CREF’s existing 7 partner commercial partner banks are quite banks by conservative and risk making all 28 averse especially when Class ‘A’ and it comes to investing in ‘B’ banks community owned RE eligible to projects. invest in RE projects. 3 NRREP, the Operational 3 3 9 AEPC has devised a 30 June December • RE projects baseline mechanism for SASEC 2017 2017 are not project of and RERL to coordinate financially RERL, has their activities for attractive phased out development of mini on 30 June hydro and solar mini 2017. The grid projects. It is project was expected that the RERL not able to targets will be met achieve from these projects many of its with financial support ambitious from SASEC. targets including 25 MWs of 54 | Page

mini/micro hydro. This has adversely affected RERL targets too.

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Table 10: Issue Log Matrix

S.N. Type Date Description and Resolution measures Status of the issue Status Change Date Identified Comments recommended

1 Geo-political December 2017 Delay in implementation AEPC/RERL will take initiative to RERL is actively March 2018 changes due to of project activities due orient provincial and Local working with AEPC state Re- to long transition period. Governments to initiate RE and other structuring Municipalities are yet to activities. governmental be fully functional. agencies to define roles and responsibilities of institutions at different levels of governance viz. municipalities, provinces and federal.

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13. PROGRESS AGAINST ANNUAL WORK PLAN 2017

UNDAF Outcome 2: Vulnerable groups have improved access to economic opportunities and adequate social protection UNDAF Output 2.4: Vulnerable groups have improved access to sustainable productive assets and environmental services UNDP/CPAP Output 2.4.1: Alternative Energy Promotion Centre's capacity enhanced for scaling up energy services in rural areas % of expen Remark Annual diture s (if Approved Donor achieve Amount agains target EXPECTED Activities Planned Activities Annual achievements of Targets ments Budget Name Spent t the not OUTPUTS of from AWP Targets approv fully in % ed achieve budget d) Activity • Workshop on Nepal's Renewable Result 1: Energy in Federal Context 100% 1,000 1,017 102% Strengthe Institutional conducted ned legal, Activity 1.1.1 Arrangement in GEF • Study on Institutional institution Support Federal structure Arrangement for RE in Local 100% 2,500 2,419 97% al, policy, preparation and Development Act in Federal planning, adoption of policy Structure carried out and that enables PPP National Workshop to • Interaction workshop on informatio model for mini- disseminate PPP “opportunity and challenges of n hydro, micro-hydro approach for GEF micro/mini hydro project 2,800 2,743 98% environm mini-grid, and 100% development of promotion in off-grid utility model” ent large-scale PV Mini/Micro Hydro conducted ensures development, thus increased attracting the Project RE private sector to Implementation Model • Preparation of project Operational 2,350 2,350 100% such projects for Private Sector Led Manual for SREP - Support investmen GEF t and Mini Grid Energy Business Model for Private Mini 100% utilization access Project (PPP Grid Energy Access Projects 1,000 971 97% model) Activity 1.1.2 • Standards & Technical Support Specifications for Grid Technical Specification UNDP 5,000 4,834 97% Annual preparation and Interconnection of MHP updated 100% for Grid connection of Targets: adoption of policy Solar PV Comprehe for future grid • Meeting on draft POM for ABC GEF 700 667 95% nsive connection of off- Projects organized

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Renewabl grid mini-hydro, • Financial & Economic Analysis of e Energy micro-hydro mini- 75% 7,000 0 0% Economic and MHP related field work ongoing Policy grid, and large- Financial Viability of GEF Formulate scale solar PV • Technical editing of RET guidelines MHP d systems and data collection of Quality of 100% 1,500 1,450 97% access to energy Activity 1.2.1: 5,000 4,782 96% Prepare • Methodology for GIS based District UNDP 100% Energy Master Plan drafted methodology for 100 54 54% integrating mini Support to prepare 15 hydro projects and Municipal Energy Plan 2,500 2,409 96% large scale solar PV • Concept of Best Available UNDP 100% system into district Technology (BAT) prepared 1,000 922 92% energy plans. Activity 1.3.3 Completed training • Orientation for Mini Hydro and awareness Workshop on Mini UNDP Developers conducted 100% 2,800 2,747 98% programs for Hydro in Nepal relevant government agencies and stakeholders on Direct Knowledge Sharing • RERL supported three Hult Prize payme mini hydro and UNDP 100% 4,000 large scale solar PV Event Events - nt system UNDP Sub Total Activity Result 1 35,250 31,367 Activity Fund transfer to CREF Technical Result 2: for Technical UNDP 100% 302,496 302,496 100% Assistance Increased Assistance investmen Activity 2b.1.1: • Study on Initial Environmental ts in RE Update the 4,200 4,219 100% Examination (IEE), 100% feasibility study of Detailed Feasibility the selected Mini- • Detailed Topographical Survey Study of Mini Hydro GEF hydro and Hydrological field Projects demonstration investigation, Pre-feasibility, 25,000 26,960 108% 100% projects to make it Detailed feasibility of different bankable MHPs

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• Structure and construction drawing of Bom and Patrasi, Activity 2b.1.2: GEF Detailed feasibility of different 100% 4,800 4,812 100% Support to MHPs and registration of MHPs establish and completed strengthen suitable institutional Support to establish UNDP • Registration of Tara Khola 100% 4,400 4,344 99% arrangement for Annual institutions Targets: development and GEF • Registration of Bom Khola 100% 2,200 2,262 103% support management of AEPC to mini hydro projects • SPV formation of 3 mini hydro UNDP 100% 26,000 25,326 97% initiate 1 including SPV projects MW mini model • TA for project developers of MHPs GEF 100% 22,000 23,406 106% hydro and Solar mini grid sub project projects Activity 2b.1.5: Assist in achieving Support financial • Field visit of Bankers for financial financial closure closure of 5 Mini GEF closure in Taplejung, Rukum and 100% 3,000 3,133 104% based on PPP Hydro projects Dolakha conducted model Activity 2b.1.6: GEF 8,000 7,930 99% Provide technical • TA to AEPC for construction, assistance for 2 Mini Hydro Projects GEF supervision and implementation of 100% 1,000 976 98% construction of the MHPs and data collection of MHPS UNDP 6,500 6,477 100% project Activity 2b.2.2: • TA for Taplejung mini grid and 11,000 10,934 99% Provide technical assessment of MHPs for their assistance for 2 mini grids GEF 100% 2,000 1,919 96% suitability in interconnection and construction of the grid connection project 25,000 25,040 100% Activity 2b.2.3: • Grid Interconnection of 23kW Support for piloting 9,500 9,705 102% 2 MHPs GEF Syaurebhumi MHP in National 100% grid connection of 2 Grid completed MHPs 500 460 92% Activity 2b.2.5: Document and • Documentary on Dhading Solar 1 documentary GEF 100% 1,000 977 98% disseminate lessons Project learned Activity 2b.3.2 Detailed Feasibility • Monitoring and Supervision of 80 Conduct detailed Study conducted of GEF 100% 27,000 28,264 105% solar PV systems and TA provided feasibility study of selected Solar PV

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selected demonstration demonstration projects projects • Software application for RE GEF 100% 1,000 879 88% Develop Software survey tool developed GEF • Energy Hakathon Event organized 100% 500 481 96%

UNDP • Rehabilitation of earthquake 1,400 1,322 94% Pilot low head solar PV UNDP damaged solar PV pumping 100% 2,000 1,846 92% pumping projects systems GEF 5,800 5,727 99% • Solar PV System at snake bite Pilot E4H (solar vaccine treatment center and Health Activity 2b.3.7: storages, health GEF 100% 22,500 23,493 104% facility center at Rukum and Salyan Provide technical center) installed assistance for installation of the • Solar PV System in Sahid project Pilot E4E in 1 school GEF Chandeshwor School in Dhanusa 100% 6,500 6,587 101% installed

Pilot solar PV hamlets • Solar PV system in Madanpur, UNDP 100% 22,000 21,040 96% electrification Sarlahi installed

Pilot solar PV grid • Technical verification of Solar Mini 10,000 9,740 97% Annual GEF 100% interconnection Grid at Dhading Target: 60 55 92% Support Activity 2b.3.9: • Success stories of RE solution on GEF 100% 500 444 89% AEPC to Document and earthquake completed Documentations initiate 1 disseminate lessons • Documentary on Snake Bite GEF 100% 2,400 2,372 99% MW mini learned Treatment Centre completed hydro 2b.3.10 Support for Earthquake relief and rehabilitation projects UNDP 4,500 4,408 98% 5. TA for relief and 31 DDCs • TA for AEPC to implement MHPs 100% rehabilitations GEF 1,500 1,492 99%

6. Solar solution for • Rehabilitation of earthquake public institutions GEF damaged solar PV pumping 100% 4,300 4,301 100% (VDC, health post, systems 8 systems schools, UNDP communication, • Installation of 72 Solar PV system GEF 100% 94,872 PAYME PVPS) in different institutions NT

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UNDP • TA for MHP implementation 100% 12,000 11,854 99%

Activity 2b.4.1 • Support for rehabilitation of GEF 100% 4,800 4,724 98% Assist NRREP to TA for project Kailash Khola MHP implement the implementation projects • Updated status of 30 Earthquake GEF 100% 1,000 810 81% damaged MHPs

EQ Relief and Rehab Micro Hydro Rapid assessment of micro hydro • Detailed Assessment of Earthquake 100 MHPs GEF 100% 7,500 7,617 102% damaged by damaged MHP earthquake Commercial 12,000 11,596 97% operation of micro • Commercial Operation of MHPs and 10 MHPs GEF 100% hydro damaged by Lift Irrigation 800 722 90% earthquake 800 754 94% EQ Relief and Rehab • Documentary on Relief and Rehab, Micro Hydro and Documentary GEF 100% 1,600 1,592 100% E4E, Telkuwa Irrigation Project Solar Activity 2b.5.1 • Pre - feasibility study and Detailed 2,500 2,464 99% Assist AEPC to TA for project UNDP Feasibility study and technical 100% implement the implementation survey of MHP 18,000 17,936 100% projects Sub Total Activity Result 2 631,556 728,767 Activity 3b.3.4 Activity Support Project Result 3: Developers to Improved Support Project prepare Project • TA for facilitating partner banks availability Developers to prepare Bankable Business GEF and project developers for RE 100% 500 456 91% of bankable business Plan and other financing on MHP and Solar project financial plans Loan Document for investmen MHP and Large- t supports Scale Solar PV for rural Activity 3b.5.1 RE and Prepare a model to Prepare guidelines 22,000 19,993 91% other low- promote cluster of for identifying and • Institutional strengthening and carbon enterprises in mini/ 100% assessing existing UNDP commercial operation of MHPs technolog large micro hydro and potential 6,800 6,784 100% y catchment areas enterprises

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applicatio • Detailed feasibility of micro hydro Lift Irrigation UNDP 100% 7,600 7,594 100% ns operated lift irrigation system Annual Sisno and Khuwa UNDP • Study on technical specification 100% 200 167 83% Target: Machine Supported US CREF to $8,800 design was financial allocate instrumen d for ts for installat financing ion of RE Smart- projects Prepaid meter at Bhorleni Solar • Budget was allocated for Wind Activity 3b.5.4 installation of Smart-Prepaid Hybrid Support existing meter at Bhorleni Solar Wind Minigrid entrepreneurs for Hybrid Minigrid, Makawanpur. Prepaid meter in , switching to UNDP However, the National Grid is 0% 7,000 - 0% Bhorleni, Makawanpur Makaw electric energy being extended to the village and anpur. the community will install NEA Howeve meters. r, the • Nationa l Grid is being extende d to the village and the commu nity will install NEA meters.

• Grant provided for 3 Lokta Allo, Lokta UNDP 100% 1,700 1,652 97% machines

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Activity 3b.7.1: Provide training/ orientation to potential women 2 training/ and marginalized UNDP • 50 women entrepreneurs trained 100% 11,000 11,853 108% orientations entrepreneurs to switch to electricity and establish new enterprises Sub Total Activity Result 3 56,800 48,498 Activity 4.1.1: Support AEPC to Conduct a study on implement activities • Training on monitoring and UNDP 100% 250 232 93% identification of identified by Capacity evaluation completed technical Need Assessment challenges and opportunities in Activity design, Result 4: manufacture, Upgrading & Enhanced installation and Operationalization of UNDP • TA for AEPC 100% 2,500 2,413 97% capacities after-sales services AEPC's MIS and skill of for Mini-hydro and various Large-scale solar PV stakehold systems ers in the Activity 4.2.2: RE sector Support NRREP in conducting capacity building training for Organize training for • Interaction programme with Annual developers, developers on Mini UNDP prospective mini hydro installer 100% 4,500 4,410 98% Target: consulting firms, Hydro Projects companies Capacity and relevant Building of service providers various for Mini-hydro stakehold projects ers in RE Activity 4.2.3: sector Support NRREP in UNDP 100% 400 387 97% developing project Update PVPS design • Technical editing Guidelines of development, guidelines solar PV pumping system design and integration UNDP 100% 2,300 2,209 96% manuals for large-

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scale solar PV systems

Activity 4.3.3: Quality assurance procedures, training curriculum Monitoring Equipment UNDP • Energy Monitoring device 100% 2,000 1,897 95% and manuals for Mini-hydro manufacturing and development Activity 4.4.2: Support AEPC in developing pre- Support AEPC to qualification organize training for criteria and Mini/ Large-Micro UNDP • 15 Masons have been trained 100% 9,200 9,193 100% methodology of Hydro masons, certification for electricians, etc. installation of Large-scale solar PV systems Activity 4.5.2 Develop O&M training curriculum Training on house and manuals for • 30 electricians (27 men and 3 wiring to SASEC UNDP 100% 6,000 5,922 99% large-scale solar PV women) have been trained participants systems and conduct training based on these Activity 4.5.3: Conduct O&M training for large- Conduct O&M training UNDP • 46 MHP operators trained 100% 22,000 21,095 96% scale 60kW + micro for MHP hydro plants (Operation)

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Activity 4.5.4: Develop business Conduct training on management business management training curriculum • 51 women entrepreneurs have for Mini-hydro and UNDP 100% 14,000 13,779 98% and manuals for been trained large-scale solar PV Mini/ micro-hydro systems and large-scale solar PV systems Sub Total Activity Result 4 63,150 61,536

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Annex 1: List of Micro Hydro Installed in 2017

Installed HHs S.N. Name of MHP Location District Power

(kW)

1 Khalichhhara MHP Maidi-5 Dhading 100 1020 70 2 Khar Khola MHP Khari-3 Dhading 633

3 Rawa Khola MHP Katunje-8 Dhading 100 400 35 4 Tribeni Khola Lujgrupa -7,8,9 Pancthar 338

5 Holu Khola Khalanga Jajarkot 14.5 159 22 6 Nagdewa Khola Telok Taplejung 142 51 7 Dhoreni Khola Nayakbata Jajarkot 336 13 8 Jhumara Khola Chhepaka Dadagaun Jajarkot 133 70 608 9 Aula Khola MHP Khina Kalikot 20 119 10 Majuwa Kuine Khani MHP Kuinemangale Myagdi 28 228 11 Deuchuli Panighat MHP Arkhala Nawalparasi 91 445 12 Bagaune Khola MHP Kureli Rolpa 75 382 13 Maili dovan Kupung Khola MHP Goli Solukhumbu

14 Gulsu Khola MHP Sutar Achham 19 225 24 225 15 Muja Khola MHP Barala Achham

16 Juddi Khola MHP Gotri Bajura 100 1114 100 1189 17 Juddi Khola II MHP Gotri Bajura SindrangVDC/ 256 18 Chhiriling Khola MHP Hatuwagadhi Bhojpur 26 119 19 Majuwa Kuine Khani MHP Kuinemangale Myagdi 20 310 20 Kyansi Khola MHP Morabang Rukum 52 792 21 Khati Khola MHP Laha-08 Dolpa 80

22 Daha Khola MHP Magma Rukum 20 119

23 Waksu Khola II MHP Fical GP Sindhuli 15

24 Dhawang Khola MHP Dhawang Rolpa 18 143 260 25 Dhunduri Khola MHP Jharlang Dhading 66

Total 1229.5 9695

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Annex 2: List of Institutional Solar PV in 2017 under Relief and Rehabilitation

Capacity S.N. Institutional Solar PV Location District Unit (Wp) 1 Naubise Health Post Naubise Dhading 1 300

2 Salyantar Primary Health Post Salyantar Dhading 1 300

3 Baireni Health Post Baireni Dhading 1 300

4 Sertung Health Post Sertung Dhading 1 300

5 Maidi Health Post Maidi Dhading 1 300

6 Benighat Health Post Benighat Dhading 1 300 Dhuseni Shibalaya 7 Dhuseni Shibalaya Health Post Kavre 1 300 VDC 8 Kartike Deurali Health Post Kartike Deurali VDC Kavre 1 300

9 Health Post Gothpani VDC Kavre 1 300

10 Birta Deurali Health Post Birta Deurali VDC Kavre 1 300

11 Salle Bhumlu Health Post Salle Bhumlu VDC Kavre 1 300

12 Nagre Gagarche Health Post Nagre Gagarche VDC Kavre 1 300

13 Sri Laxmi Higher Secondary School Ghangsukathikar Dolakha 1 300 Sri Sahid Smriti Abasiya Secondary 14 Jiri-6 Dolakha 1 300 School 15 Sita Paila Higher Secondary School Japhe-7 Dolakha 1 300

16 Sri Sharva Secondary School Bhi.N. Pa. Jilu Dolakha 1 300 Sri Bhangeri/Sateswor Secondary 17 Pawati Dolakha 1 300 School 18 Khopachagu Gumba Khopachagu Dolakha 1 300 Sri Birendra Higher Secondary 19 Katakuti -7 Dolakha 1 300 School 20 Sri Hilepani Sanskrit HSS Lamidanda -4 Dolakha 1 300

21 Sri Sitkha Secondary School Sunkhani -5 Dolakha 1 300 Sri Himali Health co-operative org. 22 Kabre Dolakha 1 300 Ltd 23 District police Office Charikot Dolakha 1 300

24 Janajagriti HSS Sahare Dolakha 1 300

25 Durga Higher Secondary School Magapauwa :02 Dolakha 1 300

26 Lamabagar Primary Health Post Lamabagar Dolakha 1 300

27 Narayani Primary School Laduk VDC Dolakha 1 300 Dolakha Tourism Development 28 Charikot Dolakha 1 300 Committee 67 | Page

Karki Manakamana Lower 29 Manegau Nuwakot 1 300 Secondary School 30 Tribhuvan Secondary School Archale, Manakamana Nuwakot 1 300 Ranabhumaneshwari Secondary 31 Khadga Bhanjyang Nuwakot 1 300 School 32 Ghyangphedi Primary School Ghyangphedi Nuwakot 1 300

33 Shree Kundala Sec. School Bhadrutar-1 Nuwakot Nuwakot 1 300

34 Kalika Sec School Bidur 11, Nuwakot Nuwakot 1 300

35 Uttargaya Gaupalika Office Uttargaya Gaupalika Rasuwa 1 300

36 Kalika Gaupalika Office Kalika Gaupalika Rasuwa 1 300 Parbatikunda 37 Parbatikunda Gaupalika Office Rasuwa 1 300 Gaupalika 38 Gosaikunda Gaupalika 04 Gosaikunda 04 Rasuwa 1 300

39 Gosaikunda Gaupalika Office Gosaikunda Gaupalika Rasuwa 1 300

40 Naukunda Gaupalika Office Naukunda Gaupalika Rasuwa 1 300

41 District Eye Hospital Chautara Sindhupalchowk 1 300 Indrawati Gaupalika, 42 Sipapokhare Health Post Sindhupalchowk 1 300 Sipapokhare Balephi Gaupalika, 43 Phulpingdada Health Post Sindhupalchowk 1 300 Phulpingdada Barhabise Gaupalika, 44 Budepa Health Post Sindhupalchowk 1 300 Barhabise 45 Health Post Municipality, Sindhupalchowk 1 300 Bhotechaur Panchpokhari Thanpal 46 Health Post Sindhupalchowk 1 300 Gaupalika, Baruwa 47 Helambu Health Post, Helambu Helambu Gaupalika Sindhupalchowk 1 300 Melamchi 48 Jageshwori Ni mabi Municipality-11, Sindhupalchowk 1 300 Melamchi 49 Bachchhek Health Post Hansapur VDC Gorkha 1 300

50 Bachchhek Police Post Hansapur VDC Gorkha 1 300

51 Police Post, Baluwa Simjung VDC Gorkha 1 300

52 Kharibot Health Post Kharibot VDC Gorkha 1 300

53 Mucchowk Health Post Muchhowk VDC Gorkha 1 300

54 Arupokhari health post Arupokhari VDC Gorkha 1 300

55 Kettuke Health Post Kettuke VDC Okhaldhunga 1 300

56 Jantarkhani Health Post Jantarkhani VDC Okhaldhunga 1 300

57 Shreechaur Health Post Shreechaur vDC Okhaldhunga 1 300

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58 Khiji Phalate Health Post Khiji Phalate VDC Okhaldhunga 1 300

59 Pokhare Health Post Pokhare VDC Okhaldhunga 1 300

60 Bhusinga Health Post Bhusinga VDC Okhaldhunga 1 300

61 Dimipokhari Health Post Dimipokhari VDC Ramechhap 1 300

62 Gunsi Health Post Gunsi VDC Ramechhap 1 300

63 Pakarbas Health Post Pakarbas VDC Ramechhap 1 300

64 Preeti Health Post Preeti VDC Ramechhap 1 300

65 Pharpu Birthing Center Pharpu VDC Ramechhap 1 300

66 Duragaon Health Post Duragaon VDC Ramechhap 1 300

67 Ambote Health Post Ambote VDC Sindhuli 1 300

68 Kholagaun Health Post Kholagaun VDC Sindhuli 1 300

69 Kalpa Brikshya Health Post Kalpa Brikshya VDC Sindhuli 1 300

70 Toshram Khola Health Post Toshram Khola VDC Sindhuli 1 300

71 Solpathana VDC Solpathana VDC Sindhuli 1 300

72 Ilaka Police Post Mahendrajhyadi VDC Sindhuli 1 300 Total 72 21600

Annex 3: List of Installed Solar PV in 2017

Capacity S.N. Institutional Solar PV Location District Unit (kWp) 1 Kamal Bazaar Solar Wind Mini Grid Kamal Bazar Achham 1 31.0 2 Harrekanda Solar Wind Mini Grid Surket Harrekanda 1 7.2 3 Chisapani Solar Wind Mini Grid Chisapani Sindhuli 1 35.0 The Commission for the Investigation of Abuse of 4 Tangal Kathmandu 1 375.0 Authority - Institutional Solar 5 Telkuwa Solar Irrigation Telkuwa Bara 1 4000 6 Snake Bite Treatment Center - Institutional Solar Letang Morang 1 2000 7 Snake Bite Treatment Center - Institutional Solar Itahari Sunsari 1 2.5 8 Snake Bite Treatment Center - Institutional Solar Charali Jhapa 1 2.5 9 Ramite Khola Solar Mini Grid Ramite Morang 1 35.0 10 Nawalparasi Gird connected Captive Solar PV Ranipakar Nawalparsi 1 1000.0 11 Katwara Health Post -Institutional Solar PV Katwara Salyan 1 3.0 12 Simrutu Health Post - Institutional Solar PV Simrutu Rukum 1 3.0 13 Kabilasi Mini Grid - Solar Pumping Kabilasi Sarlahi 1 6.0 Total 10 1506.2

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Annex 4: List of Photo Voltaic Pumping System Installed in 2017

Capacity S.N. Project Name District HHs (kWp)

1 Dhap Khola RSDWP Dang 1.14 41 2 Semle kholse RSDWP Udayapur 2.24 41 3 Sharki kholse RSDWP Udayapur 1.26 36 4 Odarejore RSDWP Okhaldhunga 2.40 48 5 Besitole RSDWP Ramechhap 3.00 30 6 Dhulpaira RSWDP Surkhet 1.86 40 7 Penauta RSWDP Surkhet 2.80 31 8 Gabudanda RSDWP Galdha-2, Palpa 3.92 42 9 Dharadi RSDWP Mityal-9 Palpa 3.36 31 10 Tamedhara RSDWP Surkhet 2.80 49 11 Tijugaira RSDWP Surkhet 3.00 40 12 Melganja RSDWP Dadeldhura 1300 32 13 Jamuna Mul RSDWP Achham 1.52 61 14 Patuat RSDWP Baitadi 2.73 49 15 Sisnepani RSDWP Doti 1.14 32 16 Dharapani RSDWP Surkhet 5.00 50 17 Dharapani 2 RSDWP Surkhet 3.00 44

18 Dadathok RSDWP Tanahun 1.40 64 19 Kotle Khola RSDWP Tanahun 1.90 34 20 Chhepardi RSDWP Tanahun 2.28 47 21 Chiurikhola RSDWP Rolpa 1.14 36 22 Ratomate RSDWP Tanahun 2.24 33 23 Dadui RSDWP Ilam 0.62 32 24 Kali Khola RSDWP Ilam 0.75 37 25 Nagi RSDWP Panchthar 0.82 40 26 Kanchan RSDWP Ilam 1.89 20 27 Tintale Baneli RSDWP Ilam 1.89 24 28 Kali Daha RSDWP Panchthar 4.75 54 29 Kamal Kholsi RSDWP Ilam 2.00 31 30 Sarapani RSDWP Salyan 8.80 69 31 Piuribartibang RSDWP Rolpa 3.00 37 Total 1374.65 1255

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ANNEX 5: Photo Gallery

Telkuwa Solar Irrigation Project powered by 4kWp Solar PV System, Snake Bite Treatment Center powered by 2kWp Solar PV System, Letang, Bara Morang

1 MWp solar plant in Nawalparasi House Wiring Solar DC Micro Grid

Training on Mobile Repairing, Rukum 1 Construction of 200kW Simrutu Khola Mini Hydropower Project, Rukum

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