Government of Nepal
Ministry of Energy, Water Resources and Irrigation

Alternative Energy Promotion Centre

Making Renewable Energy and Energy Efficiency Mainstream Supply in Nepal
Updates
Promotion of Solar Energy in Rural and Semi-urban Regions of Nepal (DKTI)

Project Background

Alternative Energy Promotion Centre (AEPC) is a National focal agency with the objectives to promote the use of renewable energy technologies, upgrade the living standard of the rural people, support in protecting the environment and develop commercially viable renewable energy industries in the country.

Along with other programs and projects, AEPC is executing a project “Promotion of Solar Energy in Rural and Semi-urban Regions of Nepal” with financial assistance from the Federal Government of Germany through KFW Development Bank.

Project Start Date

01 April 2022

Implementation Phase Start

17 March 2023

Project Duration

3.5 Years

Grant Support from the Federal Government of Germany through KFW Development Bank

9 million EURO

Objective: To increase the supply of solar electricity and reduce CO2 emissions through investments in on-grid (solar rooftop systems) and off-grid (solar irrigation pumps, solar mini-grids) Photovoltaic (PV) systems.

Project Management: The Project is being implemented by the Project Implementation Unit (PIU) established by AEPC. The PIU has been implementing the project with the support from Tractebel Engineering GmbH as Project Implementation Consultant (PIC). The PIU is responsible to implement the subprojects including the accompanying measures at the national and sub-national level.

Physical Target

Project Component 1: On-grid Solar Rooftop Systems

Component-1A: Solar PV Rooftop for Commercial & Industrial (C&I) Entities

Cumulative Target Value

15 MW

Tentative number

30

Beneficiaries

C&I Entities

Target Area

Nationwide

Reduction of CO2 emission

7,300 tonnes per year

Project Component 2: Off-grid Solar PV System

Component 2A: Solar Irrigation Pump (SIP)

Cumulative Target Value: 0.6 MW

Reduction of CO2 emission: 300 tonnes per year

Solar Irrigation Pumps (SIPs) are categorized into three sub-components

Component 2A.1

Component 2A.2

Component 2A.3

SIP-S: Small size, Individual farmer / firm owned SIP

SIP-M: Medium size, community-based SIP

SIP-L: Large size, community-based     pilot subprojects

Tentative number: 200

Tentative number: 22

Tentative number: 4

Target area:

Terai

Target Area: Nationwide

Target area: Nationwide

 

Component-2B: Solar Mini Grid Projects (SMGs)

Cumulative Target Value

0.4 MW

Tentative number of mini grids

6 (2-Clusters)

Beneficiaries

600 Households (tentative) and PEUs

Target area

Karnali Province and Sudurpashchim Province

Reduction of CO2 emission

200 tonnes per year

 Implementation Process

AEPC will publish notice for applications from the interested and eligible beneficiaries through national daily newspaper. The interested and eligible beneficiaries can submit the demand application along with the supporting documents to AEPC.

Subproject Implementation Cycle

Subproject Implementation Cycle

 

 

 

 

Project Component 1: On-grid Solar Rooftop Systems:

The Application (demand) will be received from the interested beneficiaries: Commercial and Industrial (C&I) entities and eligible Energy Service Companies (ESCOs). AEPC will support implementing the demand by providing 50% interest subsidy for 5 years as provisioned in the Renewable Energy Subsidy Policy 2022. The other sub-component of DRE is under discussion and will be implemented later.

Project Component 2: Off-grid Solar Irrigation Pumps (SIPs) and Solar Mini Grids (SMGs)

Component 2A.1

Component 2A.2

Component 2A.3

SIP-S: Individual /firm owned small SIP

SIP-M: Medium Size (community type)

SIP-L: Large Size (Pilot Project)

AEPC will support the implementation by providing up to 60% investment subsidy of the total investment cost but not exceeding NPR 2 million as per the provision of the Renewable Energy Subsidy Policy 2022. The remaining 40% of the investment cost will be contributed by the end user including support of Local Government (LG)/Provincial Government (PG).

The large irrigation pumps (SIP-L) will be introduced as pilot subprojects. The maximum of 80% investment subsidy will be provided for the proposed 4 number of pilot subprojects. The remaining of the investment cost will be covered by raising equity from local stakeholders (LG/PG/Users Group /other organizations).

Project Component 2B: Solar Mini Grids (SMGs)

AEPC will support the implementation by providing 90% subsidy of the total investment cost (for LG owned SMG) as per the provision of Renewable Energy Subsidy Policy 2022. The remaining 10% equity of the total investment shall be covered by the LG. The SMG site shall have no electricity access through NEA grid and other micro/mini grid services. The implementation of SMG subprojects must support the objectives of last mile electrification based on the last mile electrification report of the GoN.