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Renewable Energy for Rural Livelihood (RERL)

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Renewable Energy for Rural Livelihood (RERL) NEPAL 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
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