ANNUAL PROGRESS REPORT 2018 Renewable Energy for Rural Livelihood (RERL)

Removing barriers for increased utilization of renewable energy in Nepal

RERL is providing post -installation support in micro hydro sector. This has been helpful in making their organization capable, management transparent and efficient, thereby increasing revenue generation.

OUR PARTNERS December, 2018 ANNUAL PROGRESS REPORT

PROJECT PROFILE

About the Project Geographic coverage of the project

Project Title: Renewable Energy for Rural Livelihood National level coverage (Yes/No): Yes Number of Provinces covered: NA Award ID: 00076958 Number of Districts Covered: NA Number of Municipalities Covered: NA Web link: www.aepc.gov.np Number of Rural Municipalities Covered: NA

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: Number and proportion of households benefitting from clean, affordable and sustainable energy access

Country Programme Outcome 1: By 2022, impoverished, especially economically vulnerable, unemployed and under-employed and vulnerable people, have increased access to sustainable livelihood, safe and decent employment and income opportunities

Country Programme Output 1.1.: Policy, institutional and capacity development solutions lead to improved disaster and climate resilient livelihoods, productive employment and increased productivity in rural areas Country Programme Output Indicator 1.1.2: Number of households with energy access with UNDP-supported interventions (SDG7.1.1)

Project Duration Implementing Partner(s) Implementation Modality

Start Date: 21 July 2014 1. Ministry of Energy Water National Implementation Modality (NIM) Resource and Irrigation End Date: 30 June 2019 (MoEWRI) / Alternative Energy Promotion 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 2018: USD 4,951,721.19

Budget 2018: USD 828,000

Expenditure 2018 (GEF & UNDP only): USD 820,643

Budget Utilization % (2018) 99%

Name: Satish Gautam Name: Nawa Raj Dhakal Project Manager Acting Executive Director Date: Date: 1 Feb 2019 December, 2018 ANNUAL PROGRESS REPORT

TABLE OF CONTENT

CONTENT PAGE NO

Abbreviation 4

List of Tables 6

1. EXECUTIVE SUMMARY 7

2. BACKGROUND AND RATIONALE 8

3. PROJECT SUMMARY AND OBJECTIVES 8

4. PROGRAMMEATIC REVISION 9

5. NARRATIVES ON KEY RESULTS ACHIEVED IN 2018 11

5.1 Progress toward the CPD Outcome 17

5.2 Progress on Project Outputs 28

6. BUDGET AND EXPENDITURE 46

7. CROSS CUTTING ISSUES 48

7.1 Targeting and Voice/Participation of target groups 48

7.2 Gender equality, Women’s empowerment and Social Inclusion 48

7.3 National Capacity Development 49

7.4 Sustainability 49

7.5 South- South and Triangular cooperation 51

7.6 Partnership 51

7.7 Promotion of civic engagement 51

7.8 Expanding Opportunities for Youth 52

7.9 Innovation 52

7.10 Knowledge Management and Products 53

8. LESSON LEARNED 53

9. IMPLEMENTATION ISSUES AND CHALLENGES 54

10. PRIORITIES FOR 2019 54

11. A SPECIFIC STORY 55

12. ISSUES AND RISK LOGS 56

2 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

13. PROGRESS AGAINST ANNUAL WORKPLAN 60

14. ANNEX 71

 Annex 1: List of Municipality (Demand for MEP) 71

 Annex 2: List of Institutional Solar PV installed in 2018 71

 Annex 3: List of Solar Mini Grid installed in 2018 72

 Annex 4: List of Micro Hydropower Project installed in 2018 72

 Annex 5: List of Rehabilitated Micro Hydropower Project 73

 Annex 6: Photo Gallery 75

3 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

ABBREVIATION

AEPC : Alternative Energy Promotion Centre

BFI : Banking and Financial Institutions

BoA : Business Opportunities Assessment

CAA : Country Action Agenda

CPP : Community Private Partnership

CREF : Central Renewable Energy Fund

CoP : Conference of Parties

DDC : District Development Committee

DEMP : District Eletrification Master Plan

DFS : Detailed Feasibility Study

DoED : Department of Energy Development

ESCO : Energy Service Companies

GEF : Global Environment Facility

GESI : Gender Equality and Social Inclusion

GIS : Geographic Information System

HEC : Hydro Energy Concern

HH : Household

IGA : Income Generating Activities

ISPV : Institutional Solar Photo Voltaic

IP : Investment Prospectus kW : Kilowatt

MEP : Municipal Energy Plan

MHP : Micro Hydro Project

MoEWRI : Ministry of Energy, Water Resources and Irrigation

MW : Megawatt

NMHDA : Nepal Micro Hydro Development Association

MoU : Memorandum of Understanding

4 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

MQAU : Monitoring and Quality Assurance Unit

MSME : Micro, Small & Medium Enterprises

NEA : Nepal Electricity Authority

NPC : National Planning Commission

NRREP : National Renewable Rural Energy Programme

PEUC : Productive Energy Use Component

POV : Power Output Verification

PPA : Power Purchase Agreement

PPP : Public Private Partnership

PV : Photo Voltaic

RE : Renewable Energy

RERA : Renewable Energy for Rural Area

RERL : Renewable Energy for Rural Likelihood

RET : Renewable Energy Technology

SASEC : South Asia Sub-regional Economic Cooperation

SDG : Sustainable Development Goal

SCECO : Salleri Chialsa Electricity Company

SEforALL : Sustainable Energy for ALL

SHS : Solar Home System

SPV : Special Purpose Vehicle

UNDP : United Nations Development Programme

UPEI : University of Prince Edward Island

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

5 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

LIST OF TABLES

TABLE NO. TITLE PAGE NO

Table 1: Outcome and Output Statements 14

Table 2: Progress towards the UNDAF/CPAP Outcomes 17

Table 3: Financial Closure of Mini Hydro Projects 21

Table 4: Mini Hydro Project Under Construction 22

Table 5: Distribution of MHP by Rural/Urban Municipalities 24

Table 6: Vendor Financing Challenge Fund 25

Table 7: Progress on Output Indicators 28

Table 8: Output wise annual budget and corresponding expenditure 46

Table 9: Sources of funds Budget and Utilization of the project period 47

Table 10: M&E Expenditure: In 2018, Project spend on M&E activities 48

Table 11: Risk Log Matrix 56

Table 12: Issue Log Matrix 59

Table 11: Progress Against Annual Work Plan 2018 60

6 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

1. EXECUTIVE SUMMARY 2018 has been a remarkable year for renewable energy as it has been mainstreamed in the White Paper of Ministry of Energy, Water Resources and Irrigation (MoEWRI). Moreover, as AEPC has now come under the jurisdiction of MoEWRI, it is expected that collaboration with Department of Electricity Development (DoED) and Nepal Electricity Authority (NEA), major government agencies mandated for electricity generation and distribution, all are under the same ministry. Further, the MoEWRI has taken initiative to draft AEPC’s Act that will insure AEPC’s autonomy and clarify its roles and responsibilities at federal, provincial and municipal levels. RERL helped AEPC to draft its Transition Paper reflecting the new context and provided inputs on Draft AEPC Bill to be submitted to Government of Nepal Building on the Local Government Operation Act 2017, RERL supported Palungtar Municipality, Gorkha and Mahankal Rural Municipality, Lalitpur to prepare their Municipal Energy Plans (MEP) with focus on domestic uses such as clean cooking, lighting and operating household appliances, community systems for street lighting, community centers, schools and health centers and productive uses. Earlier, RERL had prepared the methodology for municipal energy planning which is followed by GIZ RERA to support 16 municipalities to prepare their MEPs. In 2018, the guidelines for development of utility scale solar PV projects were finalized by a task force with representation from RERL/AEPC, DoED, MoEWRI and Nepal Electricity Authority (NEA). The document has been submitted to MoEWRI for endorsement and implementation. The guidelines cover aspects from project conception, survey, design, financing and applicable rules and regulations. It is expected that the guidelines will help both developers and regulators to align their expectations and come to common understanding on forms, formats, legal requirements, etc. for development of utility scale solar PV systems. RERL is providing technical assistance to develop 4.3MW of mini hydro and 500kWp of solar mini grid projects under AEPC/SASEC with ADB funding. As of December 2018, 165kWp solar mini grid projects have been completed and 310kWp are under construction. RERL is supporting from survey, design, procurement, construction supervision to institution formation and strengthening, business opportunity assessment, financial closure and business plan preparation. For sustainable operation of mini hydropower projects developed with AEPC fund, RERL carried out a study on governance and management of mini hydro in Nepal and identified Salleri Chialsa Mini Hydropower Project as the most suitable model. To replicate this successful management system, AEPC and (SCECO), owner of Salleri Chialsa Mini Hydro Project, have signed an MoU. As per the MoU, AEPC will procure SCECO services for capacity development of AEPC supported mini hydro project personnel for smooth operation and management. Based on the remarkable impacts of solar PV back-up system in health centers, supported by RERL under “energy for health”, UNDP provided additional financial assistance to procure and install 3kWp solar PV back up systems in 6 Snake Bite Treatment Centers operated by the Nepal Army and 3kWp solar systems in 4 Birthing Centers and 3 Health Centers established with UNICEF funding in . The back-up system in Snake Bite Treatment Centers provide uninterrupted power supply to operate refrigerated storage for anti-snake venom vaccines whereas the fully equipped birthing centers were unable to provide services due lack of power supply. After the successful interconnection of 23kW Syaurebhumi MHP, Nuwakot, with the national grid, RERL and AEPC supported interconnection of the 40kW Leguwa Khola MHP, Dhankuta, the 90 kW Chimal MHP, Tapjejung and the 100kW Midim Khola MHP, Lamjung were also interconnected with the grid in 2018. Interconnection of micro hydro with the grid helps generate additional revenue for the MHP and avoid transmission losses of NEA. RERL worked with AEPC to complete 9 solar pumping projects funded by KfW. Altogether RERL supported AEPC to install 50 KfW funded PVPS projects benefiting 430 HHs. Under its support for the private sector, RERL provided financial and technical assistance to Hydro Energy Concern (HEC) Pvt. Ltd, the contractor of the 200kW Simrutu Khola MHP, the 200kW Giri Khola MHP and the

7 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

500kW Phawa Khola MHP. The Hydro Energy Concern has been involved in micro hydropower projects for over a decade but had limited experience in mini hydro. RERL is supporting HEC through CREF to remove cash flow constraint and help build up its financial management capacity. 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, 1,270 productive use enterprises have been established with financial assistance of AEPC; of which female entrepreneur operated 70 enterprises.

2. BACKGROUND AND RATIONALE

Over 94.7% of the population of Nepal has access to electricity. However, in rural areas, it is only 70.7%. Most of the households in the country receive electricity from the national grid and about 23% from off-grid renewable energy sources such as Pico Hydro (<10kW), Micro Hydro (10 to 100kW) and Solar Home Systems (SHS)1. 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 where water is scarce making hydro power plant infeasible, larger solar Photo Voltaic (PV) systems have higher potential to contribute for economic growth of the energy deprived communities as compared to the 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. This goal is expected to be met through both on-grid and off-grid energy solutions. UNDP through its Global Environment Facility (GEF) funded Renewable Energy for Rural Livelihood (RERL) project has been providing technical support to the Alternative Energy Promotion Centre (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 Public Private Partnership (PPP) modality.

3. PROJECT SUMMARY AND OBJECTIVES

The Renewable Energy for Rural Livelihood (RERL) project is funded by Global Environment Facility (GEF) and United Nations Development Programme (UNDP) and executed by Alternative Energy Promotion Centre (AEPC) under the Ministry of Energy, Water Resources and Irrigation (MoEWRI), GoN. RERL was developed as an integral part of the AEPC’s National Rural and Renewable Energy Programme (NRREP), 2012-2017. NRREP was a single programme framework agreed by GoN and development partners dedicated for the development and promotion of renewable energy. Beside NRREP, RERL has been supporting Asian Development Bank (ADB) funded (SASEC) Programme of AEPC to develop mini hydro and solar mini grid projects.

The main objective of RERL is to support AEPC to remove barriers for scaling up 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.

The project-wise targets for RERL are 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’s target is to directly support beneficiaries to develop 1 MW of mini hydro and 0.5 MW of solar PV as demonstration projects.

1 Data Source: Draft Multi Tier Framework 2019 8 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Theory of Change

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

The roles and responsibilities of main beneficiary institutions as describe in the project document have changed after the promulgation of Constitution of Nepal 2015. In the new context, the mandate to develop renewable energy (RE) and hydropower projects up to 1000 kW has been given to the Municipality. In this regard, RERL helped draft roles and responsibilities of different levels of governments for RE, which was incorporated in the Local Government Operation Act 2017. However, local governments have limited technical and managerial capacities to effectively carry out their roles as mandated by the Act. 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 targets of the SDG 7 and the White Paper of MoEWRI of reliable and affordable clean energy solutions for lighting and cooking for all by 2030. 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 through Public Private Partnership arrangement by forming Special Purpose Vehicle, which has already been incorporated in the Renewable Energy Subsidy Policy 2016. Furthermore, RERL has supported to establish public limited companies to develop Tara Khola and Bom Khola Mini Hydropower Projects.

One of the main barriers for attracting private investment in RE projects in rural areas is the Banks and Financial Institutions (BFIs) high risks perceptions of community owned and managed systems in general and in remote areas in particular. RERL and Central Renewable Energy Fund (CREF) have developed innovative financial instruments such as soft credit, credit guarantee, vendor financing and credit insurance to reduce the risks of BFIs in RE investments. RERL has supported developers of 6 mini hydropower projects to successfully achieve financial closure of their projects. Another major reason for the lack of private investment in RE sector is low returns on investment (RoI). Once demonstration project is completed, it is expected that the private sector will see the benefits in investing in renewable energy in rural areas.

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 is also supporting in capacity enhancement of governmental agencies, local and provincial governments, private sector and beneficiaries. Support for private sector is geared towards development of in-country expertise related to deployment RE technologies, governmental agencies for planning and policy and beneficiaries for smooth operation and management of RE systems.

4. PROGRAMMEATIC REVISION NA

9 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

FIVE KEY RESULT ACHIEVED IN 2018

Outcome 1: Policy • Renewable Energy Mainstreamed in the White Paper of MoEWRI 2018 & Institutions - • Draft AEPC Bill th Significant • Draft 15 Plan 1 Progress Towards • Update of CBS Statistics for RE Mainstreaming • Local Government Operation Act 2017 Renewable Energy • Municipal Energy Plan in Nepal • Grid Interconnection of RE Projects • Surplus Electricity Export

• 2MW Mini Hydropower Projects under construction Outcome 2: • 165kWp Solar Mini Grid completed & 310kWp under construction Demonstration • Solar PV solution for Projects - Access of . 7 Health & Birthing Centers Clean, Reliable & . 6 Snake Bite Treatment Centers 2 Affordable Modern . 50 water pumping projects with KfW fund – 9 in 2018 Energy Services • 4 Micro Hydro Plant interconnected to National Grid – 2 in 2018 in Nepal

Outcome 3: RE financing • Financial Closure of 6 mini hydropower projects, 2MW with USD 713,400 loan of total project cost USD 5,920,963 3 instruments - BFI

Investment

Outcome 4: • 30 Trainings and Orientations Conducted o Capacity 654 Male Participants o 248 Female Participants 4 Development

10 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

5. NARRATIVE ON KEY RESULTS ACHIEVED IN 2018 In 2018, significant progress was made towards mainstreaming renewable energy in Nepal as clearly indicated in the White Paper of MOEWRI and the draft AEPC Act, both of which see renewable energy (RE) not only as an alternative to commercial energy sources but also as one of the main contributors in energy mix of the country and an indigenous resource supporting towards energy security. Policy and Institution: RERL has extensively helped AEPC to reposition itself in the changed federal context by drafting AEPC’s Transition Paper and detailing its roles and responsibilities at federal, provincial and municipal levels which in general have been incorporated in draft AEPC Bill, which has been submitted to MoEWRI for further processing. RERL also helped AEPC to prepare its Support Package for Local and Provincial Governments for promotion of RE in Nepal and organize orientations to officials of provincial governments and municipalities in Provinces 1, 2, 4, 6 and 7. Building on the Local Government Operation Act 2017, RERL worked closely with (i) Palungtar Municipality, Gorkha and (ii) Mahankal Rular Municipality to draft their Municipal Energy Plans (MEP) with focus on domestic uses such as clean cooking, lighting and operating household appliances, community systems for street lighting, community centers, schools and health centers and productive uses. The methodology thus developed has been adopted by GIZ supported Renewable Energy for Rural Area (RERA) project to prepare MEP of 14 municipalities of Provinces 1 and 7. In the meanwhile, realizing the benefits of having periodic energy plans, other municipalities have approached AEPC/RERL to help them prepare their MEPs. In 2018, RERL received demand from 11 municipalities from Provinces 2, 3 and 4 to prepare their MEPs and have already allocated NPR. 1,800,000, list of municipalities is provided in Annex 1. In line with the Local Government Operation Act 2017, AEPC /RERL/SASEC are working closely with respective municipalities to develop demonstration projects. Municipalities are not participating as subsidy providers in these projects but as investors/developers and their capacities are also improving along the way. RERL in collaboration with Practical Action Consultancy had prepared a case study of mini hydropower projects in Nepal in July 2017, covering 8 projects managed by Nepal Electricity Authority (NEA), community and private companies. The study identified the governance and management of the 603kW Salleri Chialsa Mini Hydropower Project, which has been in operation since 1989, as the best in the country. In 2018, to replicate this successful management system, a memorandum of understanding (MoU) was signed by AEPC and Salleri Chialsa Electricity Company (SCECO), owner of Salleri Chialsa Mini Hydro Project. As per the MoU, AEPC will procure SCECO services for capacity development of AEPC supported mini hydro project personnel for smooth operation and management. On the request of Department of Electricity Development (DoED), RERL/AEPC initiated development of “Guidelines for Utility Scale Solar PV Project” in 2017. The guidelines were finalized by a task force with representation from RERL/AEPC, DoED, Ministry of Energy, Water Resources and Irrigation (MoEWRI) and NEA in September 2018. The document has been submitted to MoEWRI for endorsement and implementation. The guidelines cover aspects from project conception, survey, design, financing and applicable rules and regulations related to development of utility scale solar PV projects. The document was widely shared with stakeholders including the private sector and finalized. Demonstration Projects: RERL and SASEC are working together to develop 2.35MW of mini hydro and 500kWp of solar mini grid projects, out of which 165kWp solar mini grid projects are completed and 310kWp are under construction. RERL is mainly providing technical assistance for survey, design, procurement, construction supervision, institution formation and strengthening, business opportunity assessment, financial closure and business plan preparation. These projects have been developed under public-private-partnership (PPP) modality with financial contribution of the government, commercial banks, municipalities and beneficiary communities. It is expected that these projects will not only generate enough revenue to hire professionals for day-to-day

11 | P a g e

December, 2018 ANNUAL PROGRESS REPORT operations but also pay back their loans on time, reducing perceived risk of investing in community owned renewable energy systems in remote locations. In 2018, RERL worked with AEPC to complete 9 solar pumping projects funded by KfW, German Development Bank. Altogether RERL supported AEPC to install 50 KfW funded Photo Voltaic Pumping Systems (PVPS) benefiting 430 HHs. Based on the remarkable impacts of solar PV back-up system in health centers supported by RERL under “energy for health”in 2017 and early 2018, UNDP provided additional financial assistance to procure and install 3kWp solar PV back-up systems in 6 Snake Bite Treatment Centers operated by the Nepal Army and 3kWp solar systems in 4 Birthing Centers and 3 health centers established with UNICEF funding in Mugu district. The back-up system in Snake Bite Treatment Centers provide uninterrupted power supply to operate refrigerated storage for anti-snake venom vaccines whereas the fully equipped birthing centers were unable to provide services due to lack of power supply. With RERL support these birthing centers were able to integrate waste management by installing autoclaves. After the successful interconnection of 23kW Syaurebhumi MHP inNuwakot district with the national grid, RERL and AEPC supported interconnection of the 40kW Leguwa Khola MHP, Dhankuta, the 90 kW Chimal MHP, Tapjejung and the 100kW Midim Khola MHP, Lamjung with the grid in 2018. Interconnection of micro hydro with the grid helps generating additional revenue for the MHP and avoid transmission losses of NEA. Furthermore, having generation systems at the end of the line helps improve both voltage quality and system reliability. Based on the experience, NEA and AEPC will gradually grid connect other MHPs as the grid encroaches MHP service areas. AEPC has allocated budget to carry to feasibility study of grid interconnection of 25 micro hydropower plant. 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 achieve financial closure of 6 mini hydropower projects so far through credit from commercial banks amounting to USD 26 million. In 2018, financial closure of the 500kW Khatyad Khola Mini Hydropower Project was achieved. To ensure that women maximize benefits from access to electricity, RERL is supporting women from each beneficiary household of the 200kW Simrutu Khola Mini Hydropower Project to engage in micro financing activities. Women will directly benefit from access to finance and indirectly from group organization and management. It envisaged that after active participation in micro financing, women will be able to take up leadership positions in the cooperative responsible for operation and management of the mini hydro projects. To demonstrate financial viability of MHPs, RERL has been supporting 25 MHPs in five districts for commercial operation wherein the micro hydro is seen not only as a social infrastructure but also as 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, due to regular tariff payment and electricity export to a nearby village. This intervention also shows that with more reliable services, customers are willing to pay even increased tariffs and with proper incentives, staff are willing to work harder. According to Ms. Bhakti Thakulla, Meter Reader, post commercialization of the Darna MHP, salary is paid on time and there are other incentives provisioned by the Cooperative for its staff.

12 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Besides, 315 beneficiary women are also engaged in saving and credit scheme where they save up to NPR. 100 a month and their total savings so far is over NPR. 100,000. The women’s cooperative intends to initiate lending to members for income generating activities soon.

Community Private Partnership (CPP)Model

In 2018, the 29kW Simli MHP, West Rukum, was leased out to Mr. Moti Ram Roka, a local entrepreneur, for day to day operation and management for an annual fee of NPR. 84,000. The community decided to lease out their plant as it was generating only about NPR. 20,000 a month which was hardly enough to meet the operating costs. After taking over the management of the plant, Mr. Roka focused on increasing the number of productive use enterprises to maximize revenue. As of December 2018, Simli MHP is powering more than 40 enterprises, of which only 12 received government subsidy and the rest were established by entrepreneurs themselves. The enterprises thus established include eateries, lodges, tailoring shops, jewelry stores, beauty parlor, among others. In addition, there is 1 offset press, an automobile repair workshop and a health post powered by the MHP. Moreover, 60 different enterprises are also benefiting from better lighting in Simli Bazar. Out of 102 enterprises recorded in December 2018, 24 are owned by women and 78 by men. Altogether, these enterprises employ 96 men and 49 women. The credit for the sharp increase in number of enterprises goes to reliable electricity supply, as Mr. Roka is fully aware that his income is directly tied up with reliable supply. Mr. Roka makes NPR 75,000 from electricity sales and gives NPR 7,000 to the community as per the lease agreement. He further informed that a couple of other MHPs have also shown interest in this “community owned and privately managed model”.

Capacity Development: RERL has been designed to assist in building up AEPC’s capacity for wide scale promotion of larger RETs. RERL is working closely with AEPC’s Monitoring and Quality Assurance (MQA) Unit to institutionalize different quality assurance mechanisms related to mini/micro hydro and solar PV. RERL developed Sustainability Framework for Mini/Micro Hydro and relevant forms and formats for total quality management of both mini/micro hydro and solar PV related activities of AEPC. These systems will be internalized in AEPC in coming years. In 2018, RERL and MQA unit jointly carried out the field monitoring training for 60 independent engineers.

AEPC

Center Renewable Technical Planning and Institution Energy Fund Component Support Component Component

Monitoring & Quality Information Assurance

Biogas Biomass Solar Community Productive Climate Gender & Electrification Energy Use Carbon Social Inclusion

13 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

In 2018, RERL provided financial and technical support to Hydro Energy Concern (HEC) Pvt. Ltd, the contractor of the 200kW Simrutu Khola MHP, the 200kW Giri Khola MHP and the 500kW Phawa Khola MHP. The Hydro Energy Concern has been involved in micro hydropower projects for over a decade but had limited experience in mini hydro. RERL is supporting HEC through CREF to remove cash flow constraint and help improve its financial management capacity. Another significant RERL support for the private sector capacity development includes Preesu Electronics Pvt. Ltd and Techno Village Pvt. Ltd in both grid connections of MHP and MHP to MHP interconnection. RERL provided extensive technical support to both companies to successfully complete grid connection of 4 MHPs and establishment of Taplejung Mini Grid interconnecting 3 MHPs. Further, RERL/AEPC are working with University of Prince Edward Island (UPEI) and Engineering College to develop load controllers for both grid connection of MHP, MHP to MHP interconnection in collaboration with AKA Pvt. Ltd, Canada. The AKA Canada is willing to share intellectual property related to electronic load controllers with Nepali private companies. RERL has prepared guidelines/manual for development and management of mini hydropower projects. With the support of Salleri Chialsa Electricity Company, RERL organized a training for SASEC supported mini hydro projects on governance and management of mini hydro. 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, 1,270 productive use enterprises have been established with financial assistance of AEPC; of which women own 70. In order to bring direct impact on women empowerment, socio-economic development and ultimately reduce the poverty by involving them in income generating activities, RERL is supporting Simrutu Khola Mini Hydro Cooperative Limited to implement micro finance activities at the vicinity of their local grid coverage. So far, in this cooperative 900 women and 70 male members are involved in regular saving and credit activities from 43 micro finance groups. RERL has been providing training on account keeping, business management, marketing, etc. every year targeting women entrepreneurs so far 248 women have been trained. Details of capacity development activities is discussed below. Following table shows the linkage of outcome and output statements of the project: Table 1: Outcome and Output Statements

Outcome Statement Output Statement

CPD Outcome 1: By 2022, Output 1.1: Policy, institutional and capacity development impoverished, especially solutions lead to improved disaster and climate resilient economically vulnerable, livelihoods, productive employment and increased productivity in unemployed and under- rural areas. employed and vulnerable

people, have increased access to sustainable livelihoods, safe and UNDP Output 1.1.2. Number of households with energy access decent employment and income with UNDP supported interventions (SDG 7.1.1) opportunities.

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

14 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

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 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

15 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

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 other low-carbon technology Output 3b.2: Designed and provided technical support for financing applications platforms and services for promoting commercial financing for 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

16 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

5.1. PROGRESS TOWARDS THE CPD OUTCOMES

Table 2: Progress on Outcome Indicators

Outcome statement Outcome Baseline Cumulative Total target Milestone Achievement Year for Source of indicator Target for achieved till for 2018, if 2018 the data 2013 - 2017 any latest 2017 data

Country Programme Number of 50,261 25,000 HHs 50,261 HHs 5,000 Micro 2018 RERL MIS Output 1.1 Policy, households HHs connected to benefitted (2013 households Hydropower institutional and capacity with energy energy = 11,965, 2014 = with Plant: development solutions access with services 8,351, 2015 = electricity  28 MHPs lead to improved disaster UNDP 3,843, 2016 = access installed, and climate resilient supported 14,407 2017 = benefited livelihoods, productive interventions 11,695) 11,367 HHs employment and increased (SDG 7.1.1) productivity in rural areas Solar Mini Grid:  3 Solar Mini Grid installed, benefited 163 HHs In 2018:  Total 11,530 new HHs connected to electricity

17 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

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 is focused on enhancing the investment environment for mini hydro and large PV technologies by providing policy supports to the government along with support for policy planning and enhancing information availability for policy decisions. The project will support formulation and adoption of policy that will create positive environment for a public-private partnership (PPP) model to attract investment in mini hydro and large scale solar PV systems. Furthermore, the project will support the local government to prepare energy planning. The project will also emphasize capacity development of government officials at all level. 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 For a wider renewable energy promotion in Nepal, RERL supported AEPC to prepare new RE subsidy policy and delivery mechanism 2016. The policy is expected to reduce the initial upfront cost of renewable energy, promote productive use of energy, inject credit into the renewable energy sector, encourage private sector participation as well as improve access to cleaner and modern energy services benefitting particularly women, vulnerable communities and socially excluded groups. The new policy mainly focuses on gradually replacing subsidy by credit in the long-term. Similarly, it focuses on further scaling up of RETs and achieving the targets of the Sustainable Development Goals 7 and the White Paper 2018 of MoEWRI. Furthermore, in line with the new subsidy policy, RERL has supported to establish public limited companies to develop Tara Khola and Bom Khola Mini Hydropower Projects and helped CREF to achieved financial closure of 6 mini hydropower projects by mobilizing bank credit. Furthermore, the new RE subsidy policy introduce a Best Available Technology (BAT) which define as the least cost option/s (Best Available Technology) for given energy services/set of services. Technologies include both on-grid and off-grid solutions, for example cooking energy could be biogas or fuel wood used in an Improved Cooking Stove (ICS) or grid/off-grid electricity or a combination of these energy sources depending on the demand and supply. Least cost option takes into consideration the lifetime cost of all available technological options; not only the upfront cost but also operation and maintenance cost, insurance, cost for replacement /renovation, efficiency and losses, etc. are taken into account to ascertain the least cost option. For this, RERL supported AEPC to develop the BAT model for rural areas. In 2018, RERL supported AEPC to draft its Transition Paper reflecting the new context and provided inputs on Draft AEPC Bill to be submitted to Government of Nepal. In line with the roles and responsibilities given by the constitution to local, provincial and federal levels, RERL helped AEPC to develop the Support Package for Local and Provincial Governments for promotion of RE in Nepal. Support package includes model RE policy, methodology for MEP preparation, forms and formats for subsidy processing, etc. AEPC has signed separate MoUs with all 7 provincial governments to jointly promote renewable energy activities. In fiscal year 2018/19, AEPC has provided Conditional Grant to all 753 local and 7 provincial governments to support RE projects and activities. UNDP Delegation: On 27 March 2018, a high-level UNDP official from headquarters and Chinese Embassy, Kathmandu visited Sindhupalchowk district to observe UNDP supported post- earthquake relief and recovery activities. The delegation accompanied by Deputy Country Director (DCD) and Assistant Country Director (ACD) of UNDP Nepal also visited the premises of the District Coordination Committee (DCC). UNDP had provided 3 prefabricated buildings for office use and solar PV system for lighting and operating equipment.

18 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

GEF Mission: UNDP GEF Regional Focal Person Ms. Usha Rao visited Nepal from January 21- 27, 2018. The visit aimed to observe and understand RERL activities and progresses and potential for GEF 7 RE projects. Ms. Rao visited the 12kW Daunne Khola Micro Hydropower Plan. In the same occasion, RERL organized the stakeholder Consultation Meeting. The main objective of the meeting was to share RERL progress and impact and partnership with different governmental organizations and development partners. UNDP, GEF and AEPC agreed in principle to prepare documents for GEF 7 to formulation a follow-up project aiming at the demand side management such as clean cooking, electric mobility as well as commercialization of RE projects with involvement of private sector and BFIs. 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 line with the roles and responsibilities given by the constitution to local, provincial and federal levels, RERL/AEPC prepared methodology for preparation of Municipal Energy Plan (MEP) with focus on domestic consumption, including clean cooking, lighting and operating household appliances, community systems for street lighting, community centers, schools and health centers and productive uses. 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 is the basis for the Municipal Energy Plan, which is GIS based. This methodology has also been adopted by GIZ funded RERA project of AEPC. RERL directly provided assistance to 2 municipalities and RERA supported 14 municipalities of Provinces 1 and 7 (RERA working areas) to prepare their MEPs in 2018. RERL presented MEP preparation methodology in the orientation to municipalities of Province 2 and Jumla district organized by AEPC. After the orientation, the participants realized the importance of MEP and expressed their desire to prepare similar plans for their municipalities. In 2018, AEPC provided conditional grant of USD 8,906,165 to 753 local governments for renewable energy development at the local level, out of which, a total of USD 1,819,642 was allocated for policy, planning, management and administration of the overall activity. This allocated amount can be used to prepare municipal energy plans. In future, such conditional grants to local governments will be based on their MEPs. Likewise, AEPC provided conditional grant of USD 535,741 to provincial governments for development of renewable energy projects. In this regards, RERL carried out assessment of electricity supply and consumption of Ministry of Physical Infrastructure Development of Provinces 1, 2 and 7 for designing solar PV back up systems. Part of the conditional grant could be utilized to install solar PV back up systems. 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 As large scale solar PV system is rare in Nepal, RERL has been providing orientation and training to engineers from different government agencies such as Nepal Electricity Authority (NEA), Department of Electricity Development (DoED) and Ministry of Energy, Water Resources and Irrigation (MoEWRI) on project conception, survey, design, financing, etc. Upon the request of DoED and NEA, RERL and AEPC drafted Guidelines for “Utility Scale Solar PV Project” in 2017 which was finalized through wide stakeholders including the private sector consultation. The final guidelines were submitted to MoEWRI in 2018 for endorsement and implementation. Further, a one-day workshop was organized on 3 August 2018 for government and private sector engineers to orient them on different aspects of utility scale solar PV projects 19 | P a g e

December, 2018 ANNUAL PROGRESS REPORT developments and experiences of other countries mainly . Likewise, RERL provided training on "MW Scale Solar PV" to 14 engineers from Nepal Telecom, Nepal Electricity Authority, Water Energy and Commission Secretariat and Private Sector and “Grid connection of MHP and Solar PV” to 20 AEPC personnel. The training covered selection of solar array, inverter, row spacing calculation, losses in PV system and experience from MHP grid interconnection. These trainings will help promotion of large solar PV system in the country. As in the new federal context the mandate for the promotion of renewable energy and hydropower projects up to 1 MW has been given to the municipality, RERL supported AEPC to organize orientation on RE development to representatives of Provincial Governments and parliamentarians of Provinces 1,2,4,6 and 7. The orientation included presentations on renewable energy technologies; status of AEPC supported projects in the province and roles and responsibilities of provincial and local governments. RERL in collaboration with Practical Action Consultancy had prepared a case study of mini hydropower projects in Nepal in July 2017, covering 8 projects managed by Nepal Electricity Authority, community and private companies. The study identified the governance and management of the 603kW Salleri Chialsa Mini Hydropower Project, which has been in operation since 1989, as the best in the country. In 2018, to replicate this successful management system, AEPC and Salleri Chialsa Electricity Company (SCECO), owner of Salleri Chialsa Mini Hydro Project, signed a MoU. As per the MoU, AEPC will procure SCECO services for capacity development of AEPC supported mini hydro project personnel for smooth operation and management. SCECO provided orientation on their operation and management system to personnel of 6 mini hydropower projects funded by AEPC/SASEC. Likewise, selected managers and operators of Simrutu Khola and Tara Khola mini hydro projects were provided onsite operation and management training in Salleri. Knowledge Sharing Event: Renewable Energy for Rural Livelihood (RERL) and Nepal Micro Hydro Development Association (NMHDA) jointly organized Knowledge Sharing Event on 13 April 2018. The event aimed to share breakthrough achievements of RERL/AEPC in grid interconnection of Micro Hydro and Roles of Private Sector in promoting renewable energy in federal context. Speaking during the programme, Minister of Energy, Water Resources and Irrigation (MoEWRI) Mr. Barsha Man Pun welcomed the fact that a micro hydropower plant had been interconnected with the National Grid and promised to make necessary changes in the policy to encourage similar interconnections all over the country. Moreover, he emphasized renewable energy should not be taken as an alternative to the grid but seen as a complete solution for rural households in off grid areas. The event included presentations of technical papers and panel discussions on grid interconnection of MHPs and private sectors role in federal context.

20 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Climate Launchpad 2018: Climate Launchpad, the world’s leading green business ideas competition, was hosted for the first time in Nepal from 17 to 24 August 2018. The event was organized by Emerging Technologies Pvt. Ltd. in collaboration with the Government of Nepal, UNDP,, German Development Cooperation, Wind Power Nepal, Sagarmatha Cement, Nepal Insurance Company, Thames International College, and SUN Urja Nepal. This annual competition aims to provide a platform for helping aspiring entrepreneurs grow their green ideas into global businesses to address Climate Change. The Climate Launchpad 2018 in Nepal had 58 applications, out of which only 12 teams were selected to take part in the Boot Camp – the intensive training for the selected participants ahead of the competition. Following the first two rounds of competition, the national grand finale selected top 3 teams to represent Nepal in the Global Grand Finale in the UK in November 2018. Progress towards Outcome 2: Increased investment in RE This outcome deals with increased investment in RE projects with demonstration of technically sound and financially viable 1MW of mini hydropower projects. In this regard, RERL has been working with Central Renewable Energy Fund (CREF) of AEPC to establish financial instruments such as credit guarantee, vendor financing, credit insurance, etc. to attract private investment in renewable energy projects. RERL is working with SASEC to develop mini hydro and solar mini grid projects. In this arrangement, SASEC provides financial assistance (both loan and subsidy) to develop these projects and RERL provides technical assistance to achieve financial closure. The following projects have achieved financial closure. Table 3: Financial Closure of Mini Hydro Projects

S.N. Project District Capacity (kW) HH 1. Simrutu Khola Rukum 200 1386 2. Giri Khola Jumla 200 1840 3. Tara Khola Baglung 394 2200 4. Phawa Khola Taplejung 500 2093 5. Khatyad Khola Mugu 500 3200

6. Lower Bom Solukhumbu 200 620 Total 1,994 11,339 Progress on Output2b.1: Demonstrated PPP models facilitating cooperation between private and public sector organizations through establishment of Special Purpose Vehicles (SPV) in three selected mini hydro projects (1 MW) Community owned and managed RE projects are seen by both BFIs and private developers as highly risky and are averse to invest in such projects. RERL project document clearly mentions involvement of the private 21 | P a g e

December, 2018 ANNUAL PROGRESS REPORT sector in demonstration projects by establishing Special Purpose Vehicles (SPV), private companies or cooperatives, for sustainable operation and management. It is expected that after completion of demonstration projects the private sector, both BFIs and Energy Service Companies (ESCO) will be more willing to invest in renewable energy projects in rural areas. The following mini hydropower projects supported by RERL/SASEC/AEPC are expected to be completed in 2019. Table 4: Mini Hydro Projects Under Construction Projects District kW HHs Funding

Simrutu Khola Rukum 200 1300 SASEC

Tara Khola Baglung 384 2200 AEPC

Giri Khola Jumla 200 1840 SASEC

Phawa Khola Taplejung 500 2093 SASEC

Lower Bom Khola Solukhumbu 300 300 SASEC

Khatyad Khola Mugu 500 3200 SASEC

Total 2,048 10,933

Progress on Output 2b.2: Demonstrated a financially sustainable and reliable mini grid connecting 300 kW micro hydro systems RERL is supporting AEPC to implement Taplejung Mini Grid Project interconnecting 5 mini/micro hydropower plants and grid connection. RERL finalized the detailed feasibility study of the project and helped establish Taplejung Mini Grid Development Functional Group. RERL also designed control and protection system for interconnection and parallel operation of micro hydro power plants and grid connection. The project has 37km of 11kV transmission line that connects all 5 MHPs to the national grid. In December 2018, 3 of the 5 MHPs were successfully interconnected. The mini grid project will be completed after the commissioning of the 500kW Phawa Khola Mini Hydro Project. Grid connecting of interconnected MHPs will help generate additional revenue for the MHP and avoid transmission losses of NEA. After the breakthrough achievement of grid interconnection of 23kW Syaurebhumi MHP in Nuwakot, RERL assisted to interconnect 40kW Leguwa Khola MHP, Dhankuta, 90 kW Chimal MHP, Tapjejung and 100kW Midim Khola MHP, Lamjung with the national grid in 2018. With the grid interconnection, the Plant Load Factor (PLF) of Syaurebhumi MHP has increased to 65% from an average of less than 10% before interconnection. The increased PLF is still less than expected PLF of 95% because of higher outage of 11kV feeder line. This substantial increment of PLF is not only contributing to financial sustainability of the MHP but also utilizing the abandoned resources. Furthermore, it also contributes in reduction of transmission and distribution losses to some extent and enhances system reliability of the rural feeder line. 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 different other 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, development partners, private sector to local non-governmental organizations.

22 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

In 2018, RERL provided technical and financial assistance to promote large solar PV systems such as solar mini grid for lighting and productive uses, institutional solar for health and solar pumping for water supply and irrigation in Nepal. RERL provided technical assistance to AEPC to install 50 Photo Voltaic Pumping System funded by KfW in Baglung, Kaski, Tanahun, Pancthar, Rukum, Salyan, Acchaam, Dadeldhura, Ramechaap, Chitwan, Tanahun, Dailekh, Palpa and Gulmi and 23 more PVPS are under construction. RERL support included demand collection, Environment and Social Safeguard screening, feasibility study, design and installation. These projects are primarily for providing water supply for drinking and household uses. This year, RERL worked with SNV Nepal to install 3kWp solar PV systems in 2 health posts in Rukum and Salyan districts. The system has been providing uninterrupted power supply for lighting and operation of medical equipment. Further, RERL is working with SASEC to develop 100kW Gutu Solar Mini Grid, Surkhet and 70kW Sugarkhal Solar Mini Grid, Kailali. The 25kW Olane Solar Mini Grid and 70kW of Saptame Solar Mini Grid, Panchthar district have been installed. Besides technical support for survey and design, RERL is also supporting the beneficiaries to establish special purpose vehicle (SPV, cooperative/company) to manage their systems. These projects are funded by ADB. In 2018, RERL provided technical and financial support to install 3 solar mini grid at Morang and Parsa districts which benefiting 163 households. Based on the remarkable impacts of solar PV back up system in health centers, supported by RERL under “energy for health”, UNDP provided additional financial assistance in 2018 to procure and install solar back up systems for 3kWp solar PV back up systems in 6 Snake Bite Treatment Centers operated by the Nepal Army and 3kWp solar systems in 4 Birthing Centers established with UNICEF funding in Mugu district and 3 health posts in Surkhet and Makawanpur districts that provide services to about 60,000 households. The back up system in Snake Bite Treatment Centers provide uninterrupted power supply to operate refrigerated storage for anti-snake venom vaccines whereas the fully equipped birthing centers were unable to provide services due lack of power supply. AEPC provided solar PV solutions to ICIMOD supported earthquake resistant Dhugentar Model Village in . With ICIMOD’s support about 100 houses have been built with hollow concrete blocks. All the residents of the model village belong to the marginalized dalit community. AEPC support includes solar systems for lighting residences, streets and a community center. RERL coordinated AEPC support and provided technical assistance to install the systems. In 2018 RERL provided technical and financial support to install 13 solar PV back up for snake bite treatment center, heath post and birthing centers. Detailed provided in Annex 2. 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 In 2018, RERL provided technical assistance to AEPC to install 28 Micro Hydropower Plants with total capacity of 1,253kW and benefiting 11,367 households. Distribution of MHPs by rural/urban municipalities are given below;

23 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Table 5: Distribution of MHP by Rural/Urban Municipalities Municipality No of MHPs Capacity (kW) Households Urban 4 245 2,627

Rural 24 1008 8,740

Total 28 1,253 11,367

Progress towards Outcome 3: Improved design and packaging of investment support mechanisms for rural RE and other low-carbon technology applications This outcome focusing on enhancing the availability of RE financing through establishing financing instruments through Center Renewable Energy Fund (CREF) for manufactures and project developers as well as ensuring financial sustainability. This component deals with improved design and packaging of investment support mechanisms for rural RE and low-carbon technology applications in Nepal. A detailed study was carried out by RERL in February, 2016 to identify the reasons why Banks and Financial Institutions (BFIs) were reluctant to finance RE projects in rural area and the kind of support they 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. A soft credit and credit guarantee mechanism for financing mini hydro demonstration projects and vendor financing mechanism for small solar PV pumping for irrigation was established and operationalized by CREF with RERL support. ADB’s financial support for mini hydro and solar mini grid projects under SASEC are supported by these instruments to achieve financial closure. RERL/CREF pioneered private sector involvement in house hold size solar irrigation through vendor financing mechanism. Based on this experience, CREF with RERL and UNCDF support established Vendor Challenge Fund to encourage private sector involvement in RE projects. Under this scheme, Ghampower Consulting Pvt. Ltd has installed 7 PVPS for aquaculture (fish farming) in Bardiya, Kailali, Dang and Sarlahi districts. Progress on Output 3a.1: RERL, UNCDF and CREF studied a MHP that was funded by a micro finance company in Myagdi district of western Nepal. The 11.5kW MHP is among few projects where household equity is provided through a micro finance company. The study found that all the loans were repaid 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 mini hydro projects to initiate micro finance activities among beneficiary women. In Simrutu, Rukm women from all beneficiary households are engaged in saving and credit activities. 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 jointly established the RE Vendor Challenge Fund at CREF in 2017 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

24 | P a g e

December, 2018 ANNUAL PROGRESS REPORT government approved Vendor Finance Operation Manual. The detailed fund disbursed is given below

Table 6: Vendor Finance Challenge Fund Applicant Activity Total Budget Total Grant Disbursement (NPR) (NPR) (NPR)

Aastha Introduction of Innovative Drying Engineering Technologies in Nepal and Value 5,556,600 2,778,300 694,575 Solution Pvt.Ltd. Addition in Cash Crops

Gham Power Off Grid Bazaar for Selling Solar Nepal Pvt.Ltd. Water Pumping Systems 6,752,660 2,696,330 674,082

JBS Urja Pvt.Ltd. Implementation of PAYG Technology in Solar Energy 7,359,480 3,205,780 801,445 Devices System

Total 19,668,740 8,680,410 2,170,102

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

To demonstrate financial viability of MHPs, RERL is supporting 25 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, institutional strengthening and productive end use promotion. After RERL intervention, monthly revenue collection of the 83 kW Darna MHP, Achham increased from NPR. 36,000 to 80,000 on an average. With RERL support the MHP is practicing computerized accounting system which has drastically improved transparency and willingness among users to pay their bills on time. To ensure that women directly take advantage of access to electricity, RERL facilitated to establish women’s cooperative and engage monthly saving and credit activities. Further, RERL has carried out feasibility of lift irrigation systems to promote high value agriculture in Kailash Khola corridor. Similarly, one way of overcoming the collective action problems faced by the communities managing MHPs is to lease out the management of the plant including daily operation, minor repair and maintenance, tariff collection, etc. to a private party, entrepreneur or company for an agreed monthly/annual amount. RERL’s initiation the community leased out operation and management of Simli Khola MHP in Rukum to a local entrepreneur. RERL is working on electric cooking and space heating with electricity generated by micro hydropower plants as recommended by the MTR. One of the major hindrances in this regard is the limited power of MHPs – it is not possible to provide electricity to all beneficiaries as the designed power allocation to each household is only 200W, which is not enough for electric cooking nor space heating. RERL is testing low wattage cooking, modification of commercial available stoves and demand side management to promote electric cooking. After laboratory testing, induction stoves were given to 10 households in Simli Micro Hydro catchment area in . A two-week long baseline survey was carried out to find out the cooking habits, types and quantities of fuel used, etc. in 10 households before connecting the electric stoves. A separate three phase data logger and sensors were used to measure data in the power house to determine effects of induction cooker on the generator. The field test was conducted for 2 weeks and a follow up consumer satisfaction survey was also carried out. It was found that the micro hydro plant operated without any problems during the test. On 25 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

the consumer side, it was found that they were satisfied with the performance of induction heaters/cookers as it not only saved time and fuel cost but also time for cleaning cooking utensil. RERL will field test Infra Red and Low Wattage Heat Storage Stoves soon. RERL has successfully lab tested low wattage electric stove with storage facility in collaboration with Kathmandu Alternative Power and Energy Group. If these test are successful and the consumer accept the technologies, a section of MHP beneficiaries could be encouraged to fuel switch for cooking which would on one hand help reduce consumption of fire wood and other biomass resources and increase revenue of MHPs on the other. Progress on Output 3b.7: Ensured women and marginalized/vulnerable groups own 33% of the functional electricity based enterprises established 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 disadvantaged households. In this reporting period, RERL provided trainings to 96 women member of Simrutu Khola Mini Hydro Cooperative Limited (SKMCL)on “Financial Literacy, Leadership and Microfinance Operation”. The main objective of the training was to build capacity of beneficiaries to enhance the knowledge on financial literacy and microfinance operation. So far in this cooperative, 900 women and 70 men from 43 micro finance groups are involved in regular saving and credit activities. 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. Besides, in 2018, RERL provided support to Hydro Energy Concern to help strengthen its management. Hydro Energy Concern is supplying and installing electro mechanical equipment of 3 mini hydro projects funded by SASEC. Progress on Output 4.5: Fully trained, skilled and technically capable people available for operation, maintenance and business management In order to enhance knowledge and skill on computerized accounting system and management, RERL provided training to MHP managers. The training focused on accounting keeping through computer software. It is expected that this training will help improve financial management of MHP including accounting and book keeping. Training was also provided on demand collection and subsidy processing for Productive Energy Uses (PEU) promotion. The training was conducted from 2 to 7 September, 2018. Altogether 20 participants including 2 women from Rukum, Rolpa, Achham, Bajura and Jumla took part in the training. A 15 days long training on the “Mini/Micro Hydro Operation” was held at Surkhet from September 25 to 9 October 2018. The objective of the training was to BUDILD UP the capacity of operators for trouble shooting and smooth operation and minor repair works. Altogether 24 operators received both practical and theoretical knowledge and skills on various aspects of micro hydro operation, management, electricity distribution and regular maintenance. 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. Training on Computerized Accounting System: To improve knowledge on account keeping of MHP managers, RERL has conducted training on “Cooperative Account Keeping” for 24 participants including 2 women from Baglung, Sindhuli, Morang, Solukhumbu, Mugu Achham and Jumla districts. The training was conducted between 19 and 28 May 2018. The training focused on operation of accounting software.

26 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Training cum exposer visit: AEPC/SASEC/RERL organized training cum exposer visit for Mini Hydro Developers and officials of Rural Municipalities. The participants visited Salleri Chialsa Mini Hydro Project, which is one of the best managed community owned project in Nepal, and learnt about efficient management including reliable and quality electricity supply, appropriate tariff setting, timely revenue collection, maintaining inventory, timely consumer services and regular maintenance of the plant, etc. The participants were also orientated on Mini Hydro Operation and Management Manual drafted by RERL. Altogether, 21 people including 1 woman from Rukum, Jumla, Baglung, Mugu, Solukhumbu and Taplejung participated in the programme. Orientation on Special Purpose Vehicle (SPV): RERL organized an orientation on formation of SPV for development of the 422kW Shantipur Mini Hydro Project, Shantipur, Kailali. The orientation provided information on advantages and disadvantages of different institutional options such as cooperative and private company. A total of 35 Municipal officials and members of Users Committee including 2 women participated in the programme. on Cooperative & Company Acts. Orientation on Productive Energy Uses: RERL organized orientation on Productive Energy Uses for focal person and field coordinators of Regional Technical Service Providers (RTSP) of AEPC. The main purpose of the orientation was to provide information on subsidy policy and the processes of delivery mechanism for promotion of productive energy uses. Altogether 18 men and 2 women actively participated in the training. Monitoring Training: RERL supported Monitoring and Quality Assurance Unit of AEPC to carry out a monitoring training for engineers. The main objective of the training was imparting knowledge and skill to effectively and efficiently carry out field monitoring of the RE systems.

27 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

5.2. PROGRESS ON PROJECT OUTPUTS Table 7: Progress on Output Indicators

Cumulati Cumulative Output ve Target Milestone Progress Means of Output statement Baseline progress up to indicator for 2013 2018 2018 verification 2017 - 2017

Support AEPC Support to prepare Package for Renewable AEPC  RE Subsidy Energy prepared Policy RE Subsidy Policy Service  AEPC approved by GON Package for Support Local and Package RE Policy, Provincial GESI Government. sensitive Output 1.1 Approved and subsidy enforced policy that enables PPP  Technical policy, model for mini hydro and large Policy Rural Standard subsidy scale solar PV development, document Energy  NEA Board delivery NEA Board including fiscal incentives and on RE is in Policy Document mechanis approved Technical sustainability for possible place 2006  Connection m and Standard for NA NA changes in Nepal government Agreement draft RE interconnection of structure MHP Act MHP with the grid submitted  Operating to GoN Procedure for MHP

Documents for Power Purchase  Power Agreement between NA NA Purchase NEA and 2 MHP Agreement submitted to NEA

28 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Finalize Utility Utility Scale  Technical Technical Standard Scale Solar PV Solar PV Standard for Guidelines Guidelines publication interconnection of submitted to

solar PV with grid MoEWRI for prepared endorsement  Utility Scale Solar PV Guidelines

Prepared concept  Concept documents to documents address energy on energy crisis resulting crisis NA NA from border blockade prepared and submitted to the GoN

Municipal Energy Plan Energy Plan of Completed Municipal Energy Palungtar, and  Municipal Plan of Gorkha Gorkha submitted to Energy Plan district completed Palungtar District Municipality Output 1.2 Methodology and Renewable No. of database developed and made Energy integrated available for incorporating mini NA Master Plan RERL supported district RE hydro and large scale solar PV (DREMP) AEPC to develop NA NA  BAT report plans prepared systems into district RE plans prepared concept on BAT for 15 DDCs Prepare AEPC Act drafted Act and  Draft AEPC submitted to Act, AEPC’s role in AEPC Federal Context completed AEPC’s AEPC’s  Transition Transition Transition Paper Paper Paper

29 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

submitted to AEPC

Large Scale Solar PV Case Study completed  Case Study/ Completion Workshop on NA NA report and Enabling workshop Environment for proceeding Mini Hydro in Nepal organized

1 training on  Proceeding design of large SPV NA NA report for DEECCS Output 1.3 Completed training 3 case Knowledge and awareness programs for studies Products of relevant government agencies Preparation for No. of trainings prepared Prepare RERL such as and stakeholders on mini-hydro NA Exhibition to  Completion conducted and 6 Knowledge Website, and large-scale solar PV systems create awareness Report trainings Products Infographics, development and on productive on RE technologies  Websites, conducted Metallic end uses Infographic Board

1 Training on DFS of Mini Hydro and  Training 1 training on GIS NA NA reports for AEPC completed

Coordination Discussion on Workshop meeting organized AEPC support conducted and signed MOU package for  MOU for Power provincial and  PPT Purchase local Agreement governments

30 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Organize Event  Training Asia-Pacific Climate organized in Report Meeting conducted Lunchpad 17 to 24  Event on Sustainable August, 2018 Completion Energy for LDC Report countries

RERL is supporting No. of mini CREF banks for Output 2a.1: Commissioned 1 mini Continue Support for CREF  Bank hydro financial closure mini-hydro demonstration hydro Commitment demonstration NA projects totaling 1 MW through project / Meeting projects Financial closure of PPP model initiated Minutes commissioned Simrutu and Giri Construction Work Ongoing Khola completed

Financial Financial closure of 3 closure of Financial closure  Detailed mini hydro Tara Khola, of 2 mini hydro Feasibility projects Phawa Khola completed Report & Khatyad Khola Output 2b.1: Demonstrated PPP Guidelines for models facilitating cooperation 5 developing mini  PPP between private sector, public NA NA institutions hydro under PPP Guidelines sector, and local organizations No. of projects NA strengthene model developed through establishment of Special strengthened d including Purpose Vehicle (SPV) in three SPVs selected mini-hydro projects (1 IEE of Chukeni IEE of MW) Initiated financial Khola Mini Chukeni closure of 2 mini- Hydro Project, Khola Mini hydro projects Patrasi Jumla Hydro  Bank (Tap Khola 2,600 Project, commitment HHs and Giri Khola Patrasi Jumla 2,000) totaling 500 and Namche kW Spring conducted

31 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

DFS of 4 mini DFS of Mini DFS of 6 Mini hydro projects Hydro Projects Hydro with total capacity Projects  DFS Report of 2 MW completed completed

Institutional Support to Institutional Support for establish SPV support for 2 SPVs  Bank Mini hydro of 2 Mini on-going (Phawa Commitment Hydro Khola, Tara) Projects

No. of mini- Interconnection of Interconnectin 3 mini/micro grid and grid 2 MHP in Gulmi g 5 mini/micro hydro connection completed hydropower interconnect supported - 1 plants and grid ed in national

mini-grid connection grid  Commissioni interconnectin Erection of ng Report g 2 MHP with Transmission and Output 2b.2: Demonstrated capacity of 218 1Mini-grid Distribution line financially sustainable and kW in Gulmi interconnec completed in reliable mini-grid connecting ten completed NA ting 10 MHP Taplejung (10) micro-hydro systems (300 with 300 kW) kW capacity Grid Interconnectio Interconnecti  Commissioni - 1 mini grid Interconnection of n of 3 micro on of 40kW ng Report interconnectin 23kW hydro projects Leguwa g 6 MHPs with Syaurebhumi MHP Khola, 90kW the capacity completed Chimal Khola 106 kW in & 100kW Baglung Midim Khola revived completed

32 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

- Due diligence Due diligence of  Bid of 1 Mini Grid TMG Documents interconnectin interconnecting 7 g 8 MHPs with MHPs completed. the total Bid document is NA NA capacity of being prepared to 900kW procure completed and equipment procurement initiated

31.2 kW solar PV Install Solar DC 3 Solar Micro  Project MIS systems were Mini Grid Grid installed installed in Morang and Parsa 41 kW solar PV Systems installed

8 kW directly by Large scale Solar PV RERL under relief solar PV systems and rehabilitation Output 2b.3: Demonstrated systems with the financially sustainable and installed with NA total reliable large scale solar PV capacity of 500 capacity of Installed 72 systems (500 kW total) kW under 500 kW Institutional Solar relief and installed PV System rehabilitation Installed Solar Solar PV Back 1.5kW solar PV PV Systems in up system back up system 6 Snake Bite installed in 6 installed in Snake Treatment Snake Bite  Project MIS Bite Treatment Centers in Treatment Center at Charali Terai Centers run Jhapa by Army

33 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

3kW Solar PV Installed Solar Solar PV Back system installed in PV Systems in up system Sahid Chandeshor Health post installed in 4  Project MIS Lower Secondary and birthing Birthing School at centers in Centers and 3 Dhanusha Mugu Health Posts

Assisted AEPC to develop business NA plan for 18 kW  Project MIS solar mini grid NA under 5P

Assisted AEPC to initiate institutionalization NA of 15 kW Solar and  Project MIS 10 kW Wind NA Hybrid system in Makwanpur

Rapid assessment of 42 solar pumping systems  Project MIS and installation of NA NA 72 solar systems completed

Provided TA to Total 1.25 Total 3.25 MW Output 2b.4: Operationalized 2 Technical AEPC for MW Previ 1.8 MW electricity MW of off-grid large micro-hydro assistance for installation of electricity ously MHP generated (2.4 MW (over 60 kW) power projects large micro Micro Hydro generated insta installed from new Micro demonstrating cost-advantage, hydro systems Projects (1.25 from  Project MIS lled and Hydro + 0.66 MW feasibility, productive end-uses, and TA and new micro MHP rehabilitate from rehabilitated and best practice through financial hydro s d MHP + 0.19 MW technical assistance assistance to +0.25MW rehabilitate from solar PV) from rehabilitated

34 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

MHPs damaged +0.05MW by earthquakes from solar)

5,000 13,810 micro 3,581 new households hydro & 163 25,000 households (RERL have access to benefited households and NRREP) have electricity from solar  Project MIS have access access to mini grid = to energy electricity Total 13,973 HHs

Rapid assessment of 140 MHPs affected by earthquakes completed. USD 176,493 for  Project MIS rehabilitation of 31 NA NA MHPs, 755 kW, 7,500 HHs for immediate rehabilitation transferred to DEF

Support AEPC to establish 25 MHP

with total capacity  Project MIS of 1229kW NA NA

35 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Output 2b.5: Completed financial DFS of 1 DFS of 5 Mini DFS of Mini 4 Mini Hydro  Bid closure of 7 MW of off-grid mini- MW mini Hydro Complete Hydro Projects Project document hydro power projects replicating hydro benefiting more completed PPP model through completed than 5,000 HHs DFS of mini establishment of SPVs, NA hydro  5 mini hydro demonstrating cost-advantage, projects with feasibility, productive end-uses, total capacity of and best practice through 1.5MW is under technical assistance construction

Output 3a.1: Established a Financing financing instrument to instrument  Financial incentivize Banking and NA NA prepared and Instrument/ Financing Institutions for establishment NA NA Report Financing financing domestic manufacture process on going instrument established Output 3a.2: Established a financing instrument to TOR for credit incentivize Banking and financing has been  AEPC NA NA Financing Institutions to published in AEPC NA NA Website commercial financing for mini website. hydro and solar PV

1 gap Gap analysis  Inception Output 3b.1: Designed and Design of analysis conducted and Report provided technical support for financial conducted development of financing platforms and services package for NA and 1 business plan for promoting commercial domestic financial ongoing NA NA financing for domestic manufacturers instrument manufacturers developed

Output 3b.2: Designed and Gap analysis  Gap analysis provided technical support for Design of completed along report, 2 financing platforms and services commercial with Financial NA instruments Financial for promoting commercial financing instruments. developed NA NA instruments, financing for mini-hydro and instruments Partial Credit large-scale solar PV projects Guarantee

36 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

instrument Partial credit completed Guarantee instrument

5 PVPS are supported in Chitwan district.  CREF/Compl Vendor financing etion report instrument NA NA implemented in Chitwan

CREF, with RERL support, has established innovative financial instruments such  CREF Report as soft credit, NA NA credit guarantee and insurance to reduce the risks of BFIs to invest in RE projects

Training materials prepared & orientation for bank officials  Training organized, 15 bank Report Output 3b.3: Developed training NA NA No. of training 1 training officials materials on mini-hydro and materials for NA material participated in the large-scale solar PV projects for bankers prepared training financing institutions

RERL, UNCDF and  Training CREF jointly carried out a study NA Report on Micro Financing NA

37 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

of 12kW MHP in Myagdi

Study on Micro Financing

completed  Study Report NA NA

Output 3b.4: Created Investor’s Forum 1 event matchmaking platform for mini- No. of organized and 2 organized  Photos and hydro and large-scale solar PV platforms mini hydro NA and 1 Participants’ developers, financing institutions, created for projects pitched website NA NA list and equity investors, and matchmaking for private developed productive end users investment

657 MSMEs were established by Support AEPC PEUC/NRREP, to establish RERL provided 1182 MSME MSME NRREP direct technical established  Report/ Target:300 assistance to Project MIS establish193 No. of Output 3b.5: Functional MSMEs productive use enterprises adopting productive NA of electricity use of electricity supported 525 MSME established

Business Opportunity 1300 new Assessment in  Report/ MSMEs Tanahun, Achham NA NA Project MIS and Makwanpur carried out

38 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

RERL provided Technical Assistance to install 1182 MSME

Commercial Commercial Management 2800 Operation of Operation of improvement for  Report/ MSMEs MHP Darna, commercial Project MIS upgraded Achham & operation of MHP Simli, Rukum

2 innovative technologies for fuel switching from firewood to electricity developed and tested (Khuwa Collection of Making, Lokta Success Boiling), 1 Stories on Collect Success technology under Fuel  Report/ Stories on Fuel development Switching Project MIS Swithing (Nettle Leaves technology Drying) (Lokta Dryer) in Ghandruk, 4 electric Lokta Kaski. boiler technology fabricated and promoted at community level

Framework for development of

industrial cluster  Report/ prepared. 2 NA NA Project MIS potential rural

industrial clusters

39 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

identified. Field work completed Cooperative have been formed in Darna, Achham

9 lift irrigation projects studied. 2

lift irrigation projects (benefitting 45

HH) constructed with EDM funding and 3 under

construction. Business Opportunity  Report/

Project MIS Assessment in Tanahun, Achham NA NA and Makwanpur carried out Lift irrigation installed in Chiuritar, Simthali, Apchaur, Jarung and Chotesh VDC in Dhading

Draft MoU between AEPC and Department of Irrigation to develop lift  Report/ irrigation projects Project MIS prepared. NA NA Commercial Operation of 25 Micro Hydro in Dolakha, Baglung, 40 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Achham, Bajura, Rolpa & Rukum

Installed pre- Testing and paid meter in Installation MHP sites of 112 units prepaid Energy Meter Locally developed in Bhorleni  Report/ pre-paid meter Solar Wind Project MIS Mini-grid Project Phaparbari VDC-8, Makwanpur

Energy Field Testing of Electric Clean consumption Electric Cooking  Report/ pattern of MHPs Cooking Program in Project MIS being studied. Solabang, Rukum.

Lokta Dryer  Report/ installed in NA NA Project MIS Ghandruk

Value Chain for

Telkuwa Solar NA NA

Financial Organized Literacy, training for Co-operative Leadership and 96 women strengthening & Micro Finance members of Micro Finance for  Report Operation Simrutu Simrutu Khola Training Khola Mni Mini Hydro Hydro completed Project

41 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

including 18 male

Impact study of PEU on women NA NA  Study report completed

74 women and 80 Mobile Phone 15 Days Basic men benefitted Repair Mobile Phone from skill based Training to Repair training on Women Training to tailoring, computer Women from  Training education and Micro Hydro Reports bakery while 51 Power women trained on Project in business Musikot, management Khalanga, No. of training Output 3b.7: Ensured women and Rukum and marginalized/ vulnerable groups 2 training orientations to own 33% of the functional NA orientations 25 participants Computerized 24 members women and electricity based enterprises conducted trained from Billing Systems trained on marginalized established commercial and Computerize groups operation and Cooperative d Billing  Training institutional Accounting Systems and Report strengthening Training Cooperative Accounting including 2 women

Cooperative 32 (9 male Management and 23 55 participants Training female) trained on members  Training cooperative trained on Report management of Cooperative micro hydro Management in Hariharpur Gadi

42 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

1 gap analysis on  Gap analysis manufacturing of report NA NA mini hydro components in the country completed.

2 monitoring and quality assurance

mechanism for

mini/micro hydro NA NA and solar PV developed. 1 gap analysis, 1 Sustainability Output 4.1: Created a knowledge monitoring framework tested base of technical challenges and system, 2 and 1 workshop No. of opportunities in the design, quality organized to NA NA monitoring and manufacture (for micro-hydro assurance finalize it. Piloting quality (+60 kW) and mini-hydro), NA mechanism, on 10 MHPs assurance installation and after-sales 1 initiated. mechanism service in micro-hydro (60+ kW), framework and framework mini-hydro and large scale solar developed, 3 Remote PV systems and 1 Monitoring  Installed site workshop Systems and conducted completed in NA NA completion Sindhuli, report Okhaldhunga and Kathmandu

66 engineers Training for 66 Engineers trained on field Third party trained on  Training level monitoring Monitoring Third Party Report system Consultants Monitoring

Remote monitoring system NA NA  Software for solar PV developed

43 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

 POV POV Guideline Guideline prepared and 50 NA NA and Training engineers trained report Output 4.2: Fully trained, skilled No. of training 10 engineers from Conduct Orientation and technically capable people and manuals 4 training solar equipment Orientation Program on available for project for developing and 2 NA vendors were Program on Productive identification, feasibility studies skilled and manuals trained on Productive Energy Use and detailed design of mini-hydro technically prepared  Training and designing large Energy Use for for TRSP 16 and large-scale solar PV systems capable people orientation solar PV TRSP Focal Focal reports installations while Persons/Field Persons/Fiel 11 PVPS Coordinators d technicians Coordinators oriented

Digital ELC for micro hydro Old Output 4.3: Fully trained, skilled 2 ELC, 2 developed and ELC, and technically capable mini No. of new DLC and 1 tested in the NA NA DLC, hydro manufacturers in identified technologies turbine laboratory  Reports and areas and their after-sales for mini hydro technology Procurement Turb services designed process to ine implement digital ELC ongoing

Tariff Fixation Orientation and Operation on Tariff Guidelines for Fixation and Training on the Operation Output 4.4: Fully trained and installation of Management of Guidelines technically capable construction No. of training large micro Mini Hydro for the and installation teams within for installation 1 training  Training NA hydropower plants Power Projects Management companies to improve quality of of large micro conducted Report with 20 of Mini installed mini-hydro projects and hydro participants Hydro Power large solar PV system conducted. Projects for 17 participants

44 | P a g e

December, 2018 ANNUAL PROGRESS REPORT

Training manual Workshop for for design and Governance installation of System of Mini  Manual large solar PV Hydro Project systems is being

prepared.

Conduct House 16 Solar PV 30 technicians Wiring System trained on house Training for Operators  Training wiring at Rukum Solar PV trained on Report and Biratnagar System House Wiring Operators training

109 micro hydro Organized 45 operator operators trained training on trained on on management micro/mini micro/mini  Training and operation hydro hydro No. of people Report Output 4.5: Fully trained, skilled 60 people operation and operation trained in mini and technically capable people trained and management and hydro, large available for operation, 3 trainings management micro hydro NA maintenance and business conducted and large scale management of mini-hydro on RE as 29 women solar PV projects and large scale solar PV business entrepreneurs system NA NA trained on  Training business Report management training

45 | P a g e

6. BUDGET AND EXPENDITURE

The following table shows the output wise indicative budget and expenditure for 2018 and the sources of funds budgeted and utilized.

Table 8: Output wise annual budget and corresponding expenditure

Amount in US$ Output Annual Annual Annual Total Budget Budget Expenditure Expenditure Expenditure Utilization% through project through UNDP

Output 1.1 66,800 63,761 3,300 67,061 100%

Output 1.2 11,000 11,039 0 11,039 100%

Output 1.3 11,900 6,773 5,000 11,773 99%

Output 2b.1 112,650 110,732 0 110,732 98%

Output 2b.2 0 0 0 0 0

Output 2b.3 220,375 37,628 180,575 2,18,203 99%

Output 2b.4 23,500 21,666 0 21,666 92%

Output 2b.5 45,000 44,560 0 44,560 99%

Output 3b.1 0 0 0 0 0

Output 3b.3 0 0 0 0 0

Output 3b.5 78,300 79,114 0 79,114 101%

Output 3b.7 10,000 10,657 0 10,657 107%

Output 4.1 1,500 1,301 0 1,301 87%

Output 4.2 4,500 4,393 0 4,393 98%

Output 4.3 7,500 7,387 0 7,387 98%

Output 4.4 0 0 0 0 0

Output 4.5 33,000 33,431 0 33,431 101%

Program support 201,975 151,326 48,000 199,326 99%

Total 828,000 583,768 236,875 820,643 99%

46 | P a g e

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

Funding Total Total `Source Total Budget period Expenditu Expenditu Expenditu Expenditu expenditu Budget of Project Additional Total Expenditu Balance (Start – re 2015 re 2016 re 2017 re 2018 re till 2018 utilization Funding Budget TRAC Fund re 2014 US$ End Date) %

July 2014 – UNDP 2,000,000 299,859 2,299,85922 66,945 355,601 296,882 796,624 583,806 2,099,859 91% 200,000 Dec 2019

July 2014 – 3,000,000 GEF 3,000,000 737,836 1,325,606 420,502 223,072 95% 148,137.90 Dec 2019 144,845 2,851,862

Total 5,000,000 299,859 5299,859 211,792 1,093,437 1,622,488 1,217,126 806,878 4,951,721 93% 48,278.81

47 | P a g e

Table 10: M&E Expenditure

Total spent on Monitoring

Costs associated with UNDP/project staff, consultants, project Field Visit - USD 37,538

partners, supporting national statistical systems in designing Training – USD 7,387 project specific data collection methodologies (qualitative Staff Salary – USD 45,502 and quantitative), monitoring methods including stakeholder surveys and other qualitative methods, collection of data, Total USD 90,427 cost spent on

analysis and dissemination of the findings to inform a project, project staff and monitoring visit either with project partners or to fulfill specific UNDP/project in different project areas requirements (preferably the former).

Total spent on Decentralized Evaluations NA Costs associated in designing, implementing and disseminating evaluations for specific projects

Combined total spent on M&E USD 90,427

Narrative on Progress related to Budget and Expenditure In 2018, RERL allocated USD 828,000 to carry out various activities of which USD 600,000 was from UNDP’s TRAC fund and USD 228,000 from GEF fund. This year RERL utilized 99% 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 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 living in remote locations and women headed households. Similarly, RERL has prepared methodology for Municipal Energy Planning, which recommends both participation of women and marginalized groups and additional financial assistance for them to access clean lighting and cooking solutions.

7.2. GENDER EQUALITY, WOMEN’S EMPOWERMENT, AND SOCIAL INCLUSION RERL supported to formulate new RE subsidy policy in 2016 which provides additional financial assistance to women and members of marginalized groups. Likewise, with RERL input AEPC formulated its productive energy use promotion modality, which helps women and marginalized communities to benefit from access to electricity by establishing enterprises and income generating activities with provision of additional financial assistance. As of 2018, 1,270 productive use enterprises have been established with financial assistance of AEPC; of which women own 70. In 2018, in order to bring direct impact on women empowerment, socio-economic development and ultimately reduce the poverty by involving them in income generating activities, RERL is supporting Simrutu 48 | P a g e

Khola Mini Hydro Cooperative Limited to implement micro finance activities at the vicinity of their local grid coverage. So far, in this cooperative 900 women and 70 male members are involved in regular saving and credit activities from 43 micro finance groups. RERL has provided trainings to 96 women members of Simrutu Khola Mini Hydro Cooperative Limited on “Financial Literacy, Leadership and Microfinance Operation”. With financial assistance of UNDP and rural municipalities, RERL supported the extremely marginalized and poor Musahar, Dom and Santhal communities to install 3 Solar Micro Grids in Morang and Parsa districts. RERL is further supporting these communities to operate and manage their systems and to engage in income generating activities.

7.3. NATIONAL CAPACITY DEVELOPMENT RERL is supporting in capacity enhancement of governmental agencies, local and provincial governments, private sector and beneficiaries. Support for private sector is geared towards development of in-country expertise related to deployment of RE technologies, governmental agencies for planning and policy and beneficiaries for smooth operation and management of RE systems. In this reporting period, RERL extensively supported capacity development of AEPC to reposition itself in the changed federal context by drafting AEPC’s Transition Paper and detailing its roles and responsibilities at all levels which has been incorporated in draft AEPC Bill and its Support Package for Local and Provincial Governments for promotion of renewable energy in Nepal. In addition, RERL also supported AEPC to organized orientation to officials of provincial governments and municipalities in 5 provinces on their roles and responsibilities in promoting renewable energy and AEPC’s support. Besides, AEPC and RERL have also been working with relevant governmental organizations to promote less disseminated RE technologies like mini hydro and large solar PV. RERL/AEPC, DoED, Ministry of Energy, Water Resources and Irrigation (MoEWRI) and Nepal Electricity Authority (NEA) jointly developed Guidelines for Utility Scale Solar PV Project. The document has been submitted to MoEWRI for endorsement and implementation. UNDP/RERL supported AEPC to participate in Peer to Peer learning programme regarding its application to be Designated National Entity (DNE) of Green Climate Fund (GCF) in 2018. Once becomes a DNE it can directly access GCF fund for promotion of renewable energy in the country.

7.4. SUSTAINABILITY The Government of Nepal (GoN) has given high priority to promotion of renewable energy for both rural development and fossil fuel substitution and energy security. The Government’s priority to RE is reflected in its periodic plans, MOEWRI White Paper 2018, projects that are on-going (RERL, SASEC, SREP, RERA) or on-line (new Nepal Renewable Energy Programme of DFID, Nepal Mini Grid Project of the World Bank, etc.). RERL project was designed as an integral part of National Rural and Renewable Energy Programme (NRREP) to support AEPC to remove barriers in upscaling less disseminated renewable energy technologies such as mini hydro and large solar PV systems. RERL provided support in 3 main areas viz. i) policy and institution to create conducive environment, ii) demonstration of technically sound and financially viable mini hydro and large solar PV projects, iii) establishment and operationalization of financial instruments to attract private financing. For continuity of RERL’s best practices and implementation of recommendations from lessons learnt is to internalize them in AEPC and other relevant organizations. For this, RERL has capacity development component targeting governmental agencies, particularly AEPC, private sector and end users. RERL’s contributions and modalities for internalization are discuss below. Policy and Institution: In the policy and institutional front, RERL helped AEPC and GoN to draft several policies, guidelines, concept papers, etc. related to renewable energy development in Nepal. Among the most prominent contribution of RERL was to provide inputs to draft Local Government Operation Act (LGOA) 2017. As the 49 | P a g e

Constitution of Nepal 2015 gives the overall right to develop renewable energy, small hydropower projects, irrigation and drinking supply systems and other local services to municipalities, RERL provided extensive inputs to elaborate their responsibilities that was incorporated in LGOA 2017, which has given rights to development of renewable energy, hydro power plant up to 1MW and electricity distribution system to municipalities. After the enactment of LGOA 2017, RERL is working with AEPC to build up capacities of municipalities for planning, project identification, implementation, monitoring and post installation support related to RE projects. RERL also prepared methodology for municipal energy planning and piloted in 2 municipalities. The methodology thus developed is replicated by GIZ supported RERA project in preparing 16 Municipal Energy Plans (MEP) in Provinces 1 and 7. Further, it is envisaged that DFID supported Nepal Renewable Energy Programme will help to prepare MEPs in remaining provinces. As discussed above, the right to develop RE projects up to 1MW is with municipalities, role of the Provincial and Federal governments in this regard will be more facilitative, rather than direct implementation. RERL has helped AEPC to prepare concept paper on roles of provincial and federal governments and evolution of AEPC as RE Center of Excellence, helping build up the capacity of local governments to smoothly carry out their responsibilities per the new constitution. The draft AEPC Bill, which incorporates these ideas, has been submitted to GoN for endorsement and approval from the Parliament. The White Paper published by MOEWRI categorically states that local governments/ municipalities will be supported to develop RE projects both for local consumption as well as export to the national electricity grid. RERL supported to prepare standards/guidelines for grid interconnection of MHP and large solar PV systems, while the standards for MHP-Grid Interconnection has been approved by NEA Board and 4 such systems have been implemented, the guidelines for development and grid interconnection of utility scale solar PV systems has been submitted to MOEWRI for approval. AEPC has already established its units within the Department of Energy, Ministry of Infrastructure of Provinces 1 and 7. Provinces are responsible to support municipalities to carry out their activities and also to develop provincial level RE projects. The AEPC units work closely with provincial officials to help build up their capacity in planning, implementation, monitoring, quality assurance and standardization, resource mobilization and allocation, etc. for development of RE projects both at provincial and local levels. Demonstration Projects: At community level, RERL’s focus is on developing technical and managerial capacities of end users to sustainably operate and manage RE projects and maximize benefits. AEPC/RERL has identified Salleri Chialsa Electricity Company (SCECO) model as suitable one for operation and management of Mini Hydro Power Projects. In order to replicate the successful governance and management system in Salleri Chialsa, AEPC and SCECO have signed an MoU to support institutional strengthening of SASEC mini hydro projects. However, many communities are reluctant to go for private ownership and prefer cooperative model. Thus, RERL has prepared and is implementing comprehensive packages for establishment and strengthening of both cooperative and company models. In both models, the renewable energy systems are seen not only as social assets but also commercially viable investment and community/beneficiaries are thus oriented. In the Cooperative Model, extensive support is provided to the communities to engage in micro financing activities so that women and members of marginalized communities can maximize benefits from access to electricity for household consumption but also utilize it for establishment of productive enterprises. Furthermore, to bring efficiency in management of large micro/mini hydropower/solar irrigation projects, RERL is also promoting “Community Private Partnership” (CPP), where the community owns the power plant and leases it out for private management. RE Financing: RERL is working closely with CREF to attract private investment in off grid renewable energy projects in rural areas. Banks and Financial Institutions (BFIs) in general see investment in community owned and managed RE projects in rural areas as highly risky and are reluctant to put their money. Similarly, the private sector developers also find rural energy projects not beneficial. In such circumstances RERL supported CREF to establish and operationalize financial instruments such as soft credit, credit guarantee and vendor financing for renewable energy projects to provide assurance to BFIs to invest in community owned and managed RE projects. SASEC projects are also supported through these mechanisms to complete financial closure. These facilities are available for all AEPC supported projects. RERL was the first AEPC project to come up with the concept of attracting private investment in RE projects and made interventions in three areas as discussed above and has been able to establish conducive policy 50 | P a g e

environment, innovative financing instruments and demonstrate financial viability of RE projects particularly mini hydro, large micro hydro and solar irrigation projects. This modality has been more or less adopted in other AEPC projects like SASEC and Nepal Mini Grid Project.

7.5. SOUTH-SOUTH AND TRIANGULAR COOPERATION In 2018, UNDP Country Office China coordinated with country offices in Belt and Road area to submit proposals for China South-South Cooperation Assistance Fund (SSCAF). RERL submitted a proposal for providing renewable energy solution mainly solar PV and clean biomass in 10 rural municipalities of border districts. 7.6. PARTNERSHIPS

Asian Development Bank: RERL is providing technical assistance to AEPC to implement ADB funded SASEC project. South Asia Sub-Regional Economic Cooperation (SASEC) Programme (SASEC) project intends to support rural communities to install 4.3MW of mini hydro and 500kW of solar mini grids. In 2018, ADB and AEPC agreed to continue RERL TA support from 2019 to 2021 under a cost sharing agreement with UNDP.

The World Bank: RERL has been supporting Alternative Energy Promotion Centre (AEPC) to implement the World Bank funded Renewable Energy Component of Kabeli Transmission Project in Taplejung. In 2018, 90kW Chimal MHP was interconnected with the national grid and 4 MHPs were interconnected. This project will be completed once the 500kW Middle Phawa MHP is interconnected in the mini grid and the entire system is grid connected.

GIZ/RERA: RERL is working closely with GIZ’s Renewable Energy for Rural Area (RERA) project to promote renewable energy in the federal context. In this regard, RERL and RERA finalized methodology for preparation of municipal energy plans. RERA will supplement RERL initiatives by supporting preparation of 14 MEP in Provinces 1 and 7 under same framework and methodology. Besides, RERA is also supporting AEPC to develop frameworks, modalities, guidelines and manuals for promotion of RE projects in the new federal structure. KfW: RERL supported AEPC to install 50 solar PV pumping systems in drinking water projects funded by KfW. In 2018, 9 project were completed. After the installation of PV pumping systems 430 households have easy access to tapped drinking water. Private Sector: in 2018, RERL provided support to Hydro Energy Concern to help strengthen its management. Hydro Energy Concern is supplying and installing electro mechanical equipment of 3 mini hydro projects funded by SASEC. Another significant RERL support for the private sector capacity development includes Preesu Electronics Pvt. Ltd and Techno Village Pvt. Ltd in both grid connections of MHP and MHP to MHP interconnection. RERL provided extensive technical support to both companies to successfully complete grid connection of 4 MHPs and establishment of Taplejung Mini Grid interconnecting 4 MHPs. Salleri Chialsa Electricity Company (SCECO): In 2018, to replicate this successful management system, a MoU was signed by AEPC and Salleri Chialsa Electricity Company (SCECO), owner of Salleri Chialsa Mini Hydro Project. As per the MoU, AEPC will procure SCECO services for capacity development of AEPC supported mini hydro project personnel for smooth operation and management. RERL in collaboration with Practical Action Consultancy had prepared a case study of mini hydropower projects in Nepal in July 2017, covering 8 projects managed by Nepal Electricity Authority, community and private companies. The study identified the governance and management of the 603kW Salleri Chialsa Mini Hydropower Project, which has been in operation since 1989, as the best in the country. 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 is provided close and consistent support to build 51 | P a g e

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. So far, RERL has supported to prepare 2 Municipal Energy Plan (MEP) for Palungtar, Municipality in Gorkha and Mahankal Rural Municipality in Lalitpur. In the new federal context, the responsibility for renewable energy promotion has been given to the local governments. RERL organized 3 programmes in mid and far western regions to orient local elected officials on their roles and responsibilities.

7.8. EXPANDING OPPORTUNITIES FOR YOUTH In 2018, RERL hosted a Climate Launchpad Event, the event provided the opportunity to young entrepreneurs allowing their ideas into global business to address Climate Chang. The competition aims to provide a platform for helping aspiring entrepreneurs grow their ideas into global business to fix Climate Change. Nepal joined Climate Launchpad for the first time and invited applicants with innovations in renewable energy, energy efficiency, food and agriculture, water, transportation, industrial technology or any other way to tackle Climate Change. Moreover, RERL/AEPC working with University of Prince Edward Island (UPEI) and Kathmandu Engineering Collage (KEC) to develop load controllers for both grid connections of MHP and MHP interconnection in collaboration with AKA Pvt. Ltd, Canada.

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 as an Enterprise’. The main concept is to look at RE projects not only as social infrastructures but also as profit making assets. RERL has been piloting MHP as an enterprise concept in 25 MHPs by strengthening their institutional capacities, exploring opportunities for optimum utilization of electricity and building positive incentives in management processes. In 2018, RERL supported the 29kW Simli Khola MHP to lease out their plant to a local entrepreneur under Community Private Partnership model. After the leasing out, Simli Khola MHP has increased revenue collection by 3 folds to NPR. 75,000 per month. RERL is also collaborating with Global Alliance for Clean Cooking (GACC) to promote electric cooking in mini/micro hydro catchments areas. In this regards, RERL is working with PEEDA, Coventry University and Bristol University of UK in Rukum district to test electric stoves and understand users’ acceptability. After laboratory testing, induction stoves were given to 10 households in Simli Khola MHP catchment area in Rukum district. A two-week long baseline survey was carried out to find out the cooking habits, types and quantities of fuel used, etc. in 10 households before connecting the electric stoves. A separate three phase data logger and sensors were used to measure data in the power house to determine effects of induction cooker on the generator. The field test was conducted for 2 weeks and a follow up consumer satisfaction survey was also carried out. It was found that the micro hydro plant operated without any problems during the test. On the consumer side, it was found that they were satisfied with the performance of induction heaters/cookers as it not only saved time and fuel cost but also time for cleaning cooking utensil. RERL will field test Infra-Red and Low Wattage Heat Storage Stoves in 2019.

52 | P a g e

7.10. KNOWLEDGE MANAGEMENT AND PRODUCTS  Utility Scale Solar PV Guidelines  Mini hydro Operation Guidelines  Municipal Energy Plan (MEP)  Documentary on Commercial Operation of Micro Hydro  Documentary on Energy for Education  Documentary on Telkuwa Irrigation  Documentary on Dhading Solar  Infographics (SDGS)  http://www.aepc.gov.np  http://np.undp.org/RERL  http://www.undp.org

8. LESSONS LEARNED Community Private Partnership (CPP): In 2018, RERL supported the community of 29kW Simli Khola MHP to lease out their plant to a local entrepreneur under Community Private Partnership model. Mr. Moti Ram Roka, the leasee is responsible for day to day operation and management including tariff collection and productive end use promotion. Mr. Roka makes about NPR. 75,000 a month mainly from 40 odd enterprises using electricity and pays NPR. 7000 to the community as per the lease agreement. Mr. Roka has increased the service hours of MHP to 22 hours to encourage enterprises. Involvement of the private sector/entrepreneur in management of community owned project with correctly aligned incentives helps in smooth operation of MHPs and increase revenue generation. Capacity Development of Local Governments: Though the Constitutions of Nepal 2015 gives all the rights related to alternative/renewable energy to the local governments, their capacity is limited. Local governments require a lot of support to be able to plan, identification of projects, project implementation, monitoring and supervision. RERL is working with AEPC and other projects to develop guidelines and manuals to support the local governments. Solar Irrigation: RERL has supported several solar irrigation projects with capacity ranging from community size to household size under different modalities in the past 3 years, all of these projects have private sector involvement in one way or the other. RERL in partnership with UNESCAP had supported Raksirang Solar Irrigation Project developed jointly by extremely marginalized Chepang community and a Kathamandu based energy company. This project is now bearing fruits as Chepang farmers are growing chilies which is marketed by Saral Urja in Kathmandu. Under another modality, RERL worked with CREF and UNCDF to establish Vendor Challenge Fund (VCF) to support private sector to develop RE projects. Gham Power Private Limited has provided solar pumping for 5 fish ponds in the far western Terai under VCF. As irrigation/water lifting facility directly contributes to agricultural production and thus cash generation, the private sector has shown interest to invest in such projects. Management of Mini Hydropower Projects: Nepal has a lot of experience in micro (<100kW) and larger hydropower projects (>1000kW) for grid evacuation but limited experience in mini hydropower projects (>100 & <1000). This segment of hydropower is more complex than micro hydro but there is no economy of scale as in larger hydropower projects and thus has not been exploited. RERL carried out a study of mini hydropower projects in Nepal and found that most of them are not properly operated. There are only a few examples successfully operated mini hydro projects and all of them were supported by donors. The main lesson from these projects is that the rural community require extensive technical support before they are capable of operating mini hydropower project on their own.

53 | P a g e

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.

• 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.

10. PRIORITIES FOR 2019

TA for SASEC: South Asia Sub-Regional Economic Cooperation (SASEC) project intends to support rural communities to install 4.3MW of mini hydro and 500kW of solar mini grids. ADB and AEPC agreed to continue RERL TA support from 2019 to 2021 under a cost sharing agreement with UNDP. RERL will continue technical assistance to SASEC to complete 1MW mini hydropower projects and 500kW solar mini grids projects in 2019. Chinese Project: In 2018, UNDP Country Office China coordinated with country offices in Belt and Road area to submit proposals for China South-South Cooperation Assistance Fund (SSCAF). RERL submitted a proposal for providing renewable energy solution mainly solar PV and clean biomass in 10 rural municipalities of border districts. Terminal Evaluation of GEF: As per GEF requirement, RERL’s Terminal Evaluation needs to be carried out 3 months before the end of the project. RERL has planned to organize TE in the second quarter of 2019.

54 | P a g e

11. A SPECIFIC STORY 2

Countless Lives Saved through Solar PV Back up System in Health Center

Dr. Sandip Mahat expressed his happiness that with solar PV back up system, they could now easily operate all the equipment and safely store anti-venom vaccines. Dr. Mahat is the Head of Salkot Primary Health Centre, Surkhet, one of the beneficiaries of UNDP funded solar PV back up systems installed by RERL in 2018. He further added that 3 snake bite victims died the previous year as the Centre was not able to treat them with properly stored vaccines as the power from the local micro hydro was not sufficient to operate all the medical equipment in the Centre. In 2018, UNDP provided additional financial assistance to support install solar PV back up systems in 6 snake bite treatment centers.

According to Prof. Shyam P. Lohani of Nobel College, Pokhara University, 4823 suspected snake bite cases were reported in a one-year period between July 2008 and June 2009. However, there are limited numbers of snakebite treatment centers in the country, which face additional challenge in properly storing anti-venoms and operating suction machines due to poor and unreliable electricity supply. To ensure safe and reliable anti-venoms storage, UNDP partnered with Government of Nepal in 2016 to pilot solar PV back up systems in 3 snakebite treatment centers operated by the Nepal Army in Morang, Sunsari and Jhapa districts, where the incidences of snakebite are amongst the highest in Nepal. Each of the 1.5kWp Solar PV back up system provides electricity for storing anti- venoms safely, operating suction pumps for cleaning the infections and nebulizer. This initiative continues saving countless lives by making these centers to be energy independent.

2 https://www.academia.edu/12862631/Venomous_Snakes_and_Envenomation_in_Nepal

55 | P a g e

12. RISK AND ISSUE LOGS

Table 11: Risk and Issue Log Matrix

S.N Descriptio Category Likelihood Impact Risk Mitigation measures if risk occurs Date risk is Last Status . n (financial, of risk factor Identified Updated (scale of 1 political, (scale of 1 to to 5 with (A x B) operational, 5 with 5 5 being organizational, being the the environmental, most likely) highest regulatory, security, A impact) strategic, other) B

1 Political Political and 3 5 15 • New constitution gives right to October December Local instability Regulatory develop renewable energy & Mini 2015 2018 Government at local or Hydro to municipalities, which have Operation Act national only recently been elected & have

level limited capacity. This has affected project activities to some extent. To Methodology mitigate this situation, RERL and of Municipal AEPC have carried out several Energy Plan orientation programmes for newly

elected officials. Municipalities have provided financial assistance as Municipal investment in most of the Mini Energy Plan Hydro Projects. • RERL started to prepare District Energy Plan but as the new constitution gives rights to municipalities and roles of districts are very limited, municipalities were supported to prepare Municipal Energy Plans. For this, RERL had modified the methodology which is also used by RERA/AEPC/GIZ to prepare Municipal Energy Plans (MEP) in provinces 1 and 7. RERL has already helped 2 municipalities to 56 | P a g e

prepare Municiapl Energy Plans of Palungtar Municipalty, Gorkha and Mahankal Rural Municipality, Lalitpur and 5 are ongoing. RERA plans to prepare similar MEPs. RERL is actively working with AEPC and other governmental agencies to define roles and responsibilities of institutions at different levels of governance viz. municipalities, provinces and federal.  In this regard, instead of preparing 15 DEMP, RERL will work with municipalities to prepare 15 MEMP. However, due to the municipal elections, they are yet to be fully operational. This will delay RERL activities at the local level. RERL has been supporting recently elected municipal personnel to understand RE development in Nepal and their roles and responsibilities.

2 Lack of Financial 5 5 25 • The private sector in general have 14 14 • Delay in interest on high risk perceptions for investing October October financial the part of in off grid projects. In spite of 2017 2017 closure of mini private several calls for proposals, private hydro projects sector in sector has not indicated its

investing in willingness to invest in RE projects off-grid in rural areas. To overcome the projects situation, AEPC/RERL has encouraged the beneficiaries to establish SPVs Cooperative/Company) to own & operate their RE systems. • 1 private sector has come up with a proposal for development of a 200kW project in Dailekh district.

57 | P a g e

3 Lack of Operational 3 3 9  On the one hand, Banks consider 30 June December • RE projects willingness remote rural off-grid project as 2017 2018 are not of banks to high risk and on the other they financially lend to off- have very limited experience in attractive grid funding smaller hydro power

projects projects (<1000kW). RERL and CREF worked in two different fronts to ameliorate this situation; i) Orientation to the Banks on Mini Hydro and Large Solar PV Systems and ii) Development of appropriate financial instrument. • RERL has supported CREF to establish & operationalize innovative financial instruments including ‘Credit Guarantee’ to mitigate risk, which has helped attain financial closure of 6 Mini Hydro projects. This mechanism needs to be continued until BFIs have confidence in remote rural off grid projects.

4 Lack of Operational 3 3 9  RERL has adopted 1 Jan 2017 December • Field testing interest by "Commercialization" of MHP as a 2018 local people strategy for financial in sustainability. The strategy productive includes institutional applications strengthening and promotion of productive end uses. Besides traditional PEUs, RERL is carrying out field research to promote electric cooking, water & space heating as suggested by MTR.

58 | P a g e

Table 10: Issue Log Matrix

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

1 Government not December 2017 Delay in implementation AEPC/RERL will take initiative to RERL is actively March 2018 implementing any of project activities due orient provincial and Local working with AEPC effective policy to to long transition period. Governments to initiate RE and other encourage Municipalities are yet to activities. governmental renewable energy be fully functional. agencies to define investment from roles and the private sector responsibilities of institutions at different levels of governance viz. municipalities, provinces and federal.

59 | P a g e

13. PROGRESS AGAINST ANNUAL WORK PLAN 2018

Project Title: Renewable Energy for Rural Livelihood Programme (RERL)

Award ID: 76958

Duration of this plan : 01 January - 31 December 2018

Country Programme Outcome 1: By 2022, impoverished, especially economically vulnerable, unemployed and under-employed and vulnerable people, have increased access to sustainable livelihood, safe and decent employment and income opportunities

Country Programme Output 1.1: Policy, institutional and capacity development solutions lead to improved disaster and climate resilient livelihoods, productive employment and increased productivity in rural areas

Country Programme Output 1.1.2: Number of households with energy access with UNDP-supported interventions (SDG7.1.1)

Annual Donor Approved Achieve EXPECTED (name Annual Achievement Budget Amount Activities Planned Activities ment of Delivery OUTPUTS and of Target from Spent Target code) AWP in %

UNDP/CPAP Output 2.4.1: Alternative Energy Promotion Centre's capacity enhance for scaling up energy services in rural areas

Activity Result 1: Strengthened legal, institutional, policy, planning, and information environment ensures increased RE investment and utilization

Output 1.1: Policy in place operationalizing PPP model for mini-hydro, large-scale solar PV development, productive end-use applications including fiscal incentives and adaptability for possible changes in Nepal government structure (to federal system)

Annual Target :  Technical Assistance 100% 33,350 33,138 99% Comprehensi ve Renewable  Prepared Mini Hydro Energy Policy Sub-Activity 1.1.1.1 Finalize RE in Federal GEF Operational 100% 1,000 944 94% Formulated Renewable Energy (RE) Structure Guidelines Policy and support for its promulgation through  Workshop on government. UNDP 100% 4,150 3,897 93% Strategic & Planning

60 | P a g e

 Support AEPC to prepare Renewable Energy Service GEF 100% 1,000 967 97% Package for Local and Institutional Provincial arrangement in Government. federal structure  Workshop on AEPC’s GEF role in Federal 100% 4,000 3,924 98% Context

Technical Specification for  Prepared Utility Scale UNDP 100% 17,000 17,867 105% Grid connection of Solar PV Guidelines Solar PV

 Assessment on Activity 1.1.2 Support Quality of Access to preparation and adoption of Energy Services, policy for future grid Institutional connection of off-grid mini- Economic and Structure and hydro, micro-hydro mini- Financial Viability UNDP 100% 4,000 3,991 100% Economic Viability of grid, and large-scale solar PV of MHP Various Technological systems Options for Electrification in Rural Nepal

Study on Air UNDP  Study on Air Pollution 100% 3,300 3,300 100% Pollution

Output 1.2: Adequate information available for incorporating mini-hydro and large scale solar PV systems into district RE plans

Activity 1.2.1: Prepare methodology for integrating Support to prepare  Support mini hydro projects and 15 Municipal UNDP Municipalities to 100% 11,000 11,039 100% large scale solar PV system Energy Plan prepare Energy Plan into district energy plans.

Annual Target : Output 1.3: Completed training and awareness programs for relevant government agencies and stakeholders on mini-hydro and Comprehensi large-scale solar PV systems development and on productive end uses

61 | P a g e

ve Renewable  Prepared Knowledge Energy Policy Products of RERL Formulated Knowledge UNDP such as Website, 100% 5,000 4,924 98% Products Activity 1.3.3 Completed Infographics, Metallic training and awareness Board programs for relevant government agencies and  RERL Evaluation and stakeholders on mini hydro Further Planning and large scale solar PV Meeting Knowledge Sharing system UNDP - Discussion on AEPC 100% 6,900 6,849 99% Event support package for provincial and local governments

Sub Total Activity Result 1 89,700 89,873 100%

Activity Result 2: Increased investments in RE

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 projects (1 MW)

 Technical Assistance 100% 104,000 102,331 98%

Activity 2b.1.1: Update the feasibility study of the Detailed Feasibility  IEE OF Chukeni Khola selected Mini-hydro Study of Mini GEF Mini Hydro Project, 100% 2,250 2,249 100% demonstration projects to Hydro Projects Patrasi Jumla make it bankable

Activity 2b.1.2: Support to  Legal Compliance establish and strengthen Support to Tara Khola suitable institutional Jalabidhyut Limited, Establishment & arrangement for GEF Baglung and Bom 100% 2,800 2,793 100% Straitening of SPVs development and Khola Mini

management of mini hydro Hydropower Limited, projects including SPV model Lukla, Solukhumbu.

62 | P a g e

 Workshop on MHP Operation and Management

UNDP  Orientation to 100% 1,600 1,594 100% community on MHP companies including

exposer visit

 Inspection visit of 2b.1.5: Assist in achieving Support for 500kW Khatyad financial closure based on financial closure of GEF Khola Mini Hydro 100% 1,765 88% 2,000 PPP model Mini Hydro Project for financial closure

Output 2b.3: Demonstrated financially sustainable and reliable large scale solar PV systems (500 kW total)

 Detailed Feasibility Study (DFS) of Solar Mini-Grid Project Annual Target: Clustering Dailekh, Detailed Feasibility Demonstrate Activity 2b.3.2 Conduct Rolpa and Palpa Study conducted of 1 MW mini detailed feasibility study of  Energy Assessment of selected Solar PV GEF 100% 16,700 15,925 95% hydro selected demonstration design of solar PV demonstration projects projects systems in Province 1 projects and 2  DFS of solar pumping in Bara and Jaleswor ward 5 and 2

 Installation of Solar Pilot large solar PV PV System in village UNDP Madanpur, Kabilashi 100% 2,500 2,458 98% electrification Activity 2b.3.7: Provide Nagarpalika, Sarlahi, project technical assistance for Nepal installation of the project

 3 Solar Micro Grid DC Micro Grids - UNDP installed in Morang 100% 98,875 98,875 100% Morang and Parsa and Parsa

63 | P a g e

 Solar PV back up system installed in UNDP Birthing Centers and 100% 26,500 26,500 100% Powering in Health Posts in Mugu Birthing Centres and Surkhet with Solar PV Supported By

UNICEF in Mugu  Conducting Energy Assessment of UNDP 100% 1,600 1,384 87% Birthing Centre in Mugu

Solar PV Backup for  Solar PV back up Snake Bite systems installed in 6 Treatment Centre UNDP in Snakebite 100% 55,200 55,200 100% Operated by Nepal Treatment Centers in Army Terai

 10 Rural Solar GEF Drinking Water 100% 6,500 6,169 95% Projects completed Solar Pumping  Garnt to AEPC for UNDP implementation of 100% 4,000 3,623 91% MHPs

 Prepared Video documentary on Grid Connection of MHP

 Prepared 2 Success Stories (Grid Connection, Policy Intervention of Grid Activity 2b.3.9: Document connection) and disseminate lessons Documentations GEF 100% 8,500 8,069 95%  Collection of stories learned on Earth quake affected areas in Sindhupalchowk and Dolakah  Documentary on Dhading Solar

Projects

64 | P a g e

Annual Target: Output 2b.4: Operationalized 2 MW of off-grid large micro-hydro (over 60 kW) power projects demonstrating cost-advantage, Demonstrate feasibility, productive end-uses, and best practice through technical assistance 1 MW mini hydro projects  Detailed assessment of Power Output Verification of Malekhu Khola, Activity 2b.4.1 Assist TA for project Dhadig AEPC/NRREP to implement GEF 100% 16,500 15,452 94% implementation  Status of 30 MHP sick the projects projects  Detailed Assessment of Suryana Gad MHP, Baitadi

 Documentary on EQ Relief and Rehab Micro Documentary UNDP Telkuwa, E4E, Lift 100% 7,000 6,214 89% Hydro and Solar Irrigation, Earthquake

Output 2b.5: Completed financial closure of 7 MW of off-grid mini-hydro power projects replicating PPP model through establishment of SPVs, demonstrating cost-advantage, feasibility, productive end-uses, and best practice through technical

 IEE of Namche Spring MHP, Solu  PFS of Khaksewa Khola, Taplejung  DFS of Parajul Khola Dailekh  PFS of Tesu Khola MHP, Sankhuwashabha GEF  Layout Design of 100% 45,000 44,560 99% Saniveri MHP  PFS of Phu Gad MHP, Kalikot  DFS of Amadablam MHP, Solu  Study on cost design review and optimization study of Tap Khola MHP, Khotang

65 | P a g e

 PFS of Kunikhop Khola and Cheyong Khola MHP, Solukhumbu  Tara Khola Monitoring Baglung  PFS of Rati Khola and Lohare MHP, Dailekh  DFS of Jhankre Khola II MHP, Dolakha,  DFS of Sanni Gad Mini Hydro Project

Sub Total Activity Result 2b 4,01,525 3,95,161 98%

Activity Result 3b. Improved design and packaging of investment support mechanism for rural RE and other low carbon technology applications

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

 Technical Assistance 100% 25,500 24,773 97%

 Institutional Strengthening and Commercial Operation of MHP in Achham, Bajura, Rukum and Rolpa Annual Target:  Impact Study on Post Prepare a model Support CREF Installation support Activity 3b.5.1 Prepare to promote cluster to design services in selected guidelines for identifying and of enterprises in financial UNDP MHP 100% 16,000 16,460 103% assessing existing and mini /large micro instruments  Conduct Assessments potential enterprises hydro catchment for financing Identifying Key Areas area RE Projects to Enhance Enterprises through Renewable Energy to Improve Livelihoods of the People belonging to the Rural Communities

66 | P a g e

Video  Video Documentary documentary and on Commercial Case study of UNDP Operation of MHP 100% 5,000 4,812 96% commercial  Case study on Darna operation of MHP MHP Achham

Consultation  Workshop on MHP as workshop on MHP Enterprise UNDP 100% 1,000 923 92% as enterprise in Management KTM Guideline

 Training and Enterprise Creation Activity 3b.5.2 Support the and development in RE project developers (SPVs) Business Plan of Simrutu Khola MHP in in preparing business plan UNDP 100% 12,100 12,130 100% SPVs Rukum for promoting productive use  Data collection of of electricity MSME in selected MHP

 Testing and Installation of 112 units prepaid Energy Prepaid meter UNDP Meter in Bhorleni 100% 8,300 8,651 104% Solar Wind Mini-grid Project Phaparbari VDC-8, Makwanpur Activity 3b.5.4 Support  Collection of Success existing entrepreneurs for Stories on Fuel switching to electric energy Fuel Swithing (Allo, GEF Switching technology 100% 400 326 82% Lokta) (Lokta Dryer) in Ghandruk, Kaski.

 Feasibility Study of Piloting electric Electric Clean cooking, water & UNDP 100% 10,000 11,039 110% Cooking Program in space heating Solabang, Rukum.

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

67 | P a g e

 15 Days Basic Mobile Phone Repair Training to Women Activity 3b.7.1: Provide from Micro Hydro training/orientation to Power Project in potential women and Training/Orientatio Musikot, Khalanga, UNDP 100% 10,000 10,657 107% marginalized entrepreneurs n Rukum to switch to electricity and to  Financial Literacy establish new enterprises Training Program in Rukum, Khalanga from 1-9 October 2018

Sub Total Activity Result 3b 88,300 89,771 102%

Activity Result 4. Enhanced Capacities and skills of various stakeholders in the RE sector

Output 4. 2: Fully trained skilled and technically capable people available for project identification, feasibility studies and detailed design of mini-hydro and large-scale solar PV systems

Annual Target : Enhance  Technical Assistance 100% 1,500 1,301 87% technical capacities and skills in 4.2.2 : Support NRREP in TOT for field  Conduct Orientation design, conducting capacity coordinator & Program on manufacture, building trainings for manager on Productive Energy installation developers, consulting enterprise UNDP Use for TRSP Focal 100% 4,500 4,393 98% and firms, and relevant service development & Persons/Field operation, providers for Mini-hydro preparation of Coordinators from management projects business plan 28-31 March 2018. of rural RE projects Output 4.3: Fully trained skilled and technically capable mini hydro manufacturers in identified areas and their after-sales services planning, assessment and Activity 4.3.3: Quality monitoring assurance procedures, Support AEPC for  Training for Third training curriculum and building up field party Monitoring UNDP 100% 7,500 7,387 98% manuals for Mini-hydro monitoring Consultants 29-31 manufacturing and capacity March 2018 development

68 | P a g e

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

 Tariff Fixation and Operation Guidelines Activity 4.5.1: Develop O&M for the Management training curriculum and Develop O&M of Mini Hydro Power manuals for Mini-hydro and manual and UNDP 100% 6,000 5,852 98% Projects conduct training based on training  2 Days Workshop for these(Operation) Governance System of Mini Hydro Project

 Training on Solar System Operation, House Wiring and Electrical Safety for Activity 4.5.2 Develop O&M Solar Mini Grid training curriculum and Training on house Projects manuals for large-scale solar wiring training to UNDP 100% 10,000 10,788 108%  Basic House Wiring PV systems and conduct SASEC participants Training to Selected training based on these Participants from the Catchment Area of Tara Khola Jalabidyut Company, Baglung

 Training for Activity 4.5.3 Conduct O&M Operators of training for large-scale Conduct O&M Micro/Mini Hydro UNDP 100% 8,000 7,580 95% 60kW+ micro hydro plants training for MHP Power Project at (Operation) Khomari Khola MHP, Babiyachaur,Surkhet

Conduct training on Activity 4.5.4: Develop business business management  Computerized Billing management for training curriculum and System Training in Mini-hydro and UNDP 100% 9,000 9,211 102% manuals for Mini/micro- Madhyapur Thimi large-scale solar PV hydro and large-scale solar from 18-28 May 2018 systems ( Co- PV systems operative training)

Sub Total Activity Result 4 46,500 46,512 100%

69 | P a g e

Total Programme Cost 6,26,025 6,21,317 99%

Activity Result 5: Programme Support

GEF 100% 32,000 31,508 98% Programme Support Programme Support Activities Cost UNDP 100% 169,975 167,818 99%

Sub Total Program Support Cost 201,975 199,326 99%

Total for RERL Programme ID:88046 8,28,000 8,20,643 99%

70 | P a g e

ANNEXES

Annex 1: List of Municipality (Demand for MEP)

S.N. Municipality/Rural Municipality Province Fund Allocated (NPR.)

1. Phikkal RM 3 100,000.00

2. Bagmati RM 3 100,000.00

3. Konjyosom RM 3 100,000.00

4. Madandepur RM 3 200,000.00

5. Gorkha M 4 300,000.00

6. Dudhpokhari RM 4 100,000.00

7. Paterwasugauli RM 2 100,000.00

8. Malangwa M 2 200,000.00

9. Laxmaiya RM 2 100,000.00

10. Nagarain M 2 200,000.00

11. Tilathi Koilari RM 2 300,000.00

Total 1,800,000

Annex 2: List of Institutional Solar PV installed in 2018

S.N. Project kWp Location District

1. Snake Bite Treatment Center 2 Mahendra Nagar (Nepal Army Gad) Kanchanpur

2. Snake Bite Treatment Center 3 Mahendra Nagar (Nepal Army Kanchanpur Bahini)

3. Snake Bite Treatment Center 3 Dipayal, Nepal Army (Nepal Army Dipayal Bahini)

4. Snake Bite Treatment Center 2 Bardibas Mohotari

5. Snake Bite Treatment Center 2 Bhagawotipur Sarlahi

6. Snake Bite Treatment Center 2 Nawalpur Sarlahi

7. Health Center 2 Upaswasthy Chowk, Raksirang -6 Makawanpur

8. Community Health Center 2 Raksirang -4 Makawanpur

9. Health Center 3 Surkhet Surkhet

71 | P a g e

10. Bama Birthing Center 3 NP Mugu

11. Birthing Center 2 Mugum Karmarong GP Mugu

12. Birthing Center 3 Mugum Karmarong GP Mugu

13. Pulu Birthing Center 3 Mugum Karmarong GP Mugu

Total 32

Annex 3: List of Solar Mini Grid installed in 2018

S.N. Project kWp HHs Location District

1. Naya Basti Solar Mini Grid 5 30 Jahada-7 RM Morang

2. Birpur Solar Mini Grid 8 48 Jahada-2 RM Morang

3. Avadhpur Solar Mini Grid 5 85 Jagarnathpur-4 RM Parsa

Total 18 163

Annex 4: List of Micro Hydropower Project Installed in 2018

S.N Project Municipality District kW HHs

1. Menkhu Khola MHP Bhume - 3 Solukhumbu 15 150

2. Darimgad Khola Sotang Gaunpalika - 2 Bajhang 30.5 305

3. Nunekhu Khola Bungal Municipality Udayapur 15 150

4. Tunbang Khola Tapli Gaunpalika - 1 Rukum 32 283

5. Bhuka Khola Pandav Gupha Gaunpalika Bajura 100 1004

6. Kansa Gad Tribeni Munincipality Bajura 45 399

7. Sou Khola Fikkal Gaunpalika - 6 Sindhuli 18 204

8. Taru Gad Chhabispathivera Gaunpalika -1 Bajhang 27 27

9. Dungari Gad Masta Gaunpalika -1 Bajhang 18 320

10 Wachinle Khola Tyamkemaiyum Gaunpalika - 3 Bhojpur 40 270

Putha Uttarganga Gaunpalika - 11. Bhuchchi Khola Kalikot 35 280 14

12. Domahi Khola Palata Gaunpalika, - 7 Rukum (E) 13.5 254

13. Naiwang Khola Sunchhari Gaupalika Rolpa 100 918

72 | P a g e

14. Okam Khola Putha Uttarganga Gaunpalika Rukum (E) 69 531

Korung Khola MHP 15. Gaurishankar Gaunpalika - 7 Dolakha 30 247 (RSC)

16. Lokante Khola MHP Kanda Gaunpalika -4 Bajhang 18 160

17. Chinde Khola MHP Savapokhari Gaupalika 20. 169

Pankha Kosane Khola 18. Sarkegad gaupalika Humla 60 502 MHP

19. Kuchhe Ghatte MHP Gajadulla Gaunpalika Dolpa 50 419

20. Sepu Khola Barakot Gaunpalika-8 Jajarkot 33 300

21. Gandi Gad MHP Purbichauki Gaunpalika - 6 Doti 90 545

22. Okhatte Guda Khola Mheri Gaunpalika - 8 Jajarkot 15 240

23. Nera Khola MHP Soru Gaunpalika Mugu 65 546

24. Labur Khola MHP Muncipality Rukum (W) 85 961

25. Chmbang Khola Duikhli Gaupalika - 5 Rolpa 41.5 538

26. Mangmaya II MHP Maiwakhola Gaupalika - 3 Taplejung 62 346

27. Baudi Khola II MHP Nisdi Gaunpalika – 5 Palpa 26 182

28. Ikadi Gad II MHP Budhiganga Municipality Bajura 100 1,117

Total 1253.5 11,367

Annex 5: List of Rehabilitated Micro Hydro

S.N Project Municipality District kW HHs

1. Durlung Khola I MHP Khani Khola Gaupalika Kavreplnchowk 15 138

2. Chau Khola II MHP Khani Khola Gaupalika Kavreplnchowk 24 239

3. Chau Khola IV MHP Mahabharat Gaupalika Kavreplnchowk 20 205

4. Khani Khola I MHP Khani Khola Gauplaika Kavreplnchowk 23 154

73 | P a g e

5. Gumba Khola MHP Jugal Gaupalika Sindhupalchowk 12 160

6. Bhadrawati Khola MHP Kalinchowk Gaupalika Dolakha 15 135

7. Chyane Gumu Khola MHP Kalinchowk Gaupalika Dolakha 76 678

8. Gumu Khola Vyakure MHP Kalinchowk Gaupalika Dolakha 52 474

9. Chhahare Khola MHP Sulikot Gaupalika Gorkha 21.5 260

Total 258.5 2,443

74 | P a g e

ANNEX 6: Photo Gallery ANNEX 6: Photo Gallery

Paying Electricity Bill in Darna MHP, Achham Women Members Participating in Saving Credit Activity in Achham

25kW Olane Solar Mini Grid in Panchthar 8kW Solar Mini Grid in Jahada RM, Morang

Power House Under Consturction: 200kW Simrutu Khola Mini Hydro, Women Member took part in financial management training in Rukum Achham

75 | P a g e

76 | P a g e