Renewable Energy for Rural Areas (RERA) Programme

In Cooperation with:Published by:

BackgroundDue to the mountainous topography and geographical conditions

and the associated high costs of expanding the national grid, it is

difficult to connect all rural areas to the electricity network in Nepal.

Therefore, the Nepali Government is supporting the deployment

of decentralized renewable energy technologies (RETs) like

mini-grids, Solar Home Systems and biogas in rural areas. The

Alternative Energy Promotion Center (AEPC) is the government’s

nodal agency for scaling-up decentralized renewable energy (RE).

The promotion of decentralized RE builds strongly on subsidies

and has so far been unable to build sustainable markets for these

technologies. The reasons can be found in the lack of involvement

of local authorities and end-users in RE planning, insufficient supply

relations between technology providers and end-users, lack of access

to finance and inadequate after-sale-services.

The Nepali Government is implementing the stipulations of the new

Constitution of 2015 which devolves powers from the central to the

local and provincial governments. Provincial and local governments

are now empowered to design policies and support-programmes,

and deliver public goods and services in regards to decentralized RE.

This restructuring of the state provides many opportunities, and, at

the same time, makes profound transformations necessary in the RE

sector. Before federalization, AEPC was responsible for policy-making,

planning and implementing decentralized RE. In the new federal

structure, this mandate has been transferred to local and provincial

governments. However, the newly established local and provincial

governments lack capacities (human and technical) and means to take

up their new tasks relating to decentralized RE. In this context, AEPC is

transitioning from an implementing agency that provides services like

subsidies directly, to a support agency that enables provincial and local

governments to promote and implement RETs.

RERA ApproachRenewable Energy for Rural Areas (RERA) is a joint technical support-

programme for the Nepali decentralized RE sector bythe Government

of Nepal (GoN) and the German Federal Ministry for Economic

Cooperation and Development (BMZ). RERA is jointly implemented by

AEPC and Deutsche Gesellschaft für Internationale Zusammenarbeit

(GIZ) GmbH.

The vision of RERA is “to ensure efficient and effective service

delivery of decentralized RE through improved outreach and

enhanced local cooperation in federalized Nepal”. The programme

aims to improve the energy situation for the rural households with no,

or limited access to modern energy services, and focuses on Province

1 and 7. To achieve this goal and address the above mentioned sector-

challenges, RERA adapts a multi-level approach:

Page 1 (L to R): • Signing of the Implementation Agreement between

AEPC and GIZ in December 2017 • Participants for the Strategy Workshop of RERA at

Nagarkot in March 2018

Page 2 (L to R): • Demonstration of Solar Bubble Dryer at NARC • RETs orientation to the representatives of

Mangsebung Rural Municipality (Ilam) in November 2017

• Demonstration of the uses of improved cookstoves to households in Morang in November 2017

Photo © RERA

Programme nameRenewable Energy for Rural Areas (RERA)

Commissioned byGerman Federal Ministry for Economic Cooperation and Development (BMZ)

Country Nepal

Working areas Kathmandu, Province 1 and Province 7

Lead executing agency

Alternative Energy Promotion Centre (AEPC)

Budget € 5 million

Duration October 2016 - September 2019

BeneficiariesRural households with no, or limited access to modern energy services

1. Facilitating the Transformation of AEPC

The programme supports AEPC in transforming from an

implementing agency to a support agency in order to adapt

to the requirements of the federalized state. RERA works

together with AEPC to develop a portfolio of services that will

help provincial and local governments to plan, promote and

implement decentralized RE. Amongst others, these services

include energy planning tools, model policies and regulations.

2. Capacitating Provincial and Local Governments

RERA supports AEPC in setting up and operationalization of

two Programme Implementation Units (PIU) in Province 1

and 7. The PIU are instrumental in delivering capacity building

and organizational development to the provincial and local

governments, as well as their administrative authorities. Thereby

RERA will enable the provincial and local level to institutionalize

RE in the new government structure and include it in their service

portfolio, as well as develop effective support-programmes to

scale-up RE.

3. Developing Sustainable Markets

RERA is working with the private sector, civil society and

banking institutions to improve the supply of renewable

energy services and products. RERA is supporting local micro,

small and medium enterprises (MSMEs) and service providers

to improve their businesses and ensure after-sale-services.

Additionally, the programme is working together with financial

institutions to increase the access to finance for businesses

and end-users to purchase and market energy products and

services.

4. Empowering Women and Disadvantaged Groups

In Nepal ethnic minorities, women and lower castes are still

socially and economically marginalized. RERA empowers

women and marginalized groups by ensuring their involvement

in local-level planning and decision-making processes for

promoting RE. Furthermore, the programme is working together

with municipalities, provinces, AEPC and energy enterprises to

safeguard that women and disadvantaged groups are equally

benefitting from RETs.

Expected OutcomeThe transition from a centralized to a federalized system provides

many opportunities. Allowing local governments to provide energy

services can increase accountability, make democracy more direct and

development more demand driven, inclusive and bottom-up. RERA is

supporting this transition to leverage its potential by delivering the

following expected outcomes:

` A framework for participatory and demand-led promotion of

decentralized RE is developed and used by all three levels of

government

` Provincial and local governments are enabled to promote

decentralized RE effectively

` More people have access to modern and high-quality energy

services

` Local markets for energy services and products are strengthened,

and the private sector expands its activities

` Women and disadvantaged groups are involved in planning and

decision making processes for government energy programs,

and are equally benefitting from energy services

Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Registered offices Bonn and Eschborn, Germany

Renewable Energy for Rural Areas (RERA) Programme NTNC Complex, Khumaltar, Lalitpur T +977 1 5538129 F +977 1 5551706 E rera@giz.de Whttps://www.giz.de/en/nepal

Author(s) Renewable Energy for Rural Areas (RERA)

As at May 2018

GIZ is responsible for the content of this publication.

In cooperation with Alternative Energy Promotion Centre (AEPC)

On behalf of Federal Ministry for Economic Cooperation and Development (BMZ)

Division Development Cooperation with Asia and South-East Asia

Addresses of BMZ Bonn BMZ Berlinthe BMZ offices Dahlmannstraße 4 Stresemannstraße 94 53113 Bonn, Germany 10963 Berlin, Germany T +49 (0)228 99 535-0 T +49 (0)30 18 535-0 F +49 (0)228 99 535-3500 F +49 (0)30 18 535-2501

poststelle@bmz.bund.de www.bmz.de