Immediate Objectives of MGSP
The component has the following immediate objectives:
- Enhanced sectoral framework for policy formulation, strategy development, planning, programme implementation, and harmonization of on-and-off grid rural electrification at national and local level.
- Increased and sustainable access to and usage of electricity in the rural areas.
Scope of MGSP
MGSP has a national coverage in terms of project identification, preparation and provision of providing facilitation support for mini-grid development.
MGSP strategy is to focus on aspects such as the demand from the local areas, financial viability to sustain the scheme, etc. Furthermore, the communities have to explicitly develop electrification plans prior to approaching MGSP for assistance.
MGSP provides technical support for creating awareness, social mobilisation and integrated resource identification activities that help in creating demand at the local level. It also supports feasibility studies and provides technical assistance for quality assurance during construction, operation and management during the intervention period.
MGSP scope includes
- Mini-grid electrification in rural areas (currently through the following technologies in the long-run other technologies could be integrated):
- Mini-hydro schemes (100 kW to 1 MW)
- Micro-hydro (5 kW to 100 kW)
- Pico-hydro (up to 5 kW), including Improved Water Mill
- Supporting GoN to achieve its objective of increasing the access of electricity services in rural areas, based on an equitable distribution of resources for rural electrification with regard to the level of poverty, economic and social opportunities, geography, etc.
- Integrating electrification activities with planning activities of the local government.
- Supporting development of a policy framework for harmonising the on-and off-grid rural electrification.
- Increasing public and private sector participation in programme support identification, implementation and operation.
- Proving rural electrification to be a tool for enhancing rural economic activities, environmental protection and social justice.
The main MGSP strategy is to focus on overall sector issues and on enhancement of the procedures and framework to support the rural energy sector.
Accordingly, the main strategic considerations are as follows:
- Addressing Mini-Grid electrification schemes covering up to 1,000 kW in capacity
- Addressing Broader Financial Framework
- Strengthening Quality Assurance System
- Stakeholder Participation in Project Implementation
- Decentralised Programme Support and Implementation
The component aims to assist in increasing the access of additional 150,000 rural Nepali households to electrification. Apart from this, the component has the following expected outputs:
- Inputs to various rural energy related policies and their updates.
- Integration of rural electrification activities with local planning activities.
- Efficient and competitive service delivery mechanisms.
- Institutionalized local ownership and use of electricity in rural areas not covered by the national grid.
- Schemes identified, appraised and forwarded to Rural Energy Fund (REF) for subsidy approval.
- Provision of increased information about rural mini-grid schemes and electricity end-use possibilities.
Major MGSP Activities
In order to achieve the Component's objectives and outputs, the following activities are planned:
- Provide inputs to policy formulation.
- Advocate for mini-grid and grid connection strategy.
- Facilitate integration of electrification plan with DDC/VDC level planning.
- Monitoring of project cycle activities.
- Conduct capacity building activities.
- Quality assurance vis-a-vis mini-grid implementation.
- Conduct social facilitation activities with rural communities.
- Assist in formation of mini-grid cooperatives/user groups.
- Coordinate/interact with other programmes at local and national level.
- Identify potential schemes.
- Assist in conducting detail feasibility studies.
- Forward proposals for schemes to Technical Review Committee (TRC) and REF.
- Conduct information awareness campaigns.
- Campaign for promoting end uses.
MGSP Working Approach
Agreements have been made with the Regional Centres operated by local non-governmental organizations to cover all potential districts. These Regional Centres provide necessary technical backstopping and other support essential for sustainable operation of mini-grid schemes. They also promote productive end-use applications.
Qualified service providers from the private sector are involved in identifying, verifying and conducting detail feasibility studies. Qualified installation companies supply and installed the schemes. The terms of the contract between the qualified companies and the mini-grid developers are based on the standard practice guideline.
The registered mini-grid developers own the projects. The developer could be any registered private/public company, cooperative, and/or any other form of a legal entity. Apart from the subsidy, the mini-grid developers must ensure equity contributions.
Pico Project (up to 5 kW)
The process for installing pico hydro project are as follows:
- The community will select the pre-qualified installation company.
- The selected installation company will carry out survey and installation of the project.
- Testing and commissioning and power output test will be carried out by the installation company.
- The company is required to submit complete document to MGREC for further appraisal.
- MGREC will verify the project installation before recommending to REF for approval of subsidy.
Micro/Mini Project (Above 5 kW to 500 kW)
Depending on the size of the project, the project cycle shall entail identification, verification, feasibility study by qualified companies and appraisal of the project by MGSP and the TRC. If the outcome of the appraisal is positive the Mini-Grid developer will be eligible to apply for the subsidy as in the standard REF application form.
After commissioning of the project, MGSP verifies the commissioning and power output test reports.
The demand for Mini-Grid implementation is tremendous. As the outcome of the programme intervention, a close to 25,000 households have already benefitted with access to electricity. There are about 15 MW equivalent projects are identified and a large number of projects are under construction.