Kathmandu / Nepal has successfully established many community micro hydropower projects (MHPs). This is being possible through strong community ownership from planning and decision making to equitable benefit sharing. However, community electrification schemes, focused narrowly on installation of technology, households’ connection and driven by supply side rather than ensuring the productive use of energy. The passive approach implicitly expects MHPs to stimulate productive activities in jurisdiction and waiting for spontaneous positive effect of electrification to trickle down. Yet off-grid electrification has largely failed to achieve any lasting impact on people’s livelihoods in far-flung communities. To reap the full benefits and generate adequate revenue base to cover Operation & Maintenance of such schemes, building energy literacy at demand side is paramount for the community. This will articulate their needs and supportive in enhancing the livelihood and sustainability of MHPs via increasing the revenue through maximum use of electricity generated in productive sectors. 

As the national focal agency promoting Renewable Energy Technologies, Alternative Energy Promotion Centre (AEPC) is working for the promotion of various renewable energy technologies since its establishment. Currently, AEPC is implementing National Rural and Renewable Energy Programme (NRREP) with supports from the Government of Nepal and External Development Partners. This is a five years programme starting from mid July 2012. The Business Development for Renewable Energy and Productive Energy Use Component (PEUC) is one of the major components of NRREP. The immediate objective of PEU component is “To contribute to an increase in income generation and employment potential for micro, small and medium-sized enterprises (MSMEs) in rural areas, particularly for women and men belonging to socially and economically disadvantaged groups”. PEU promotion seeks to enable the translation of rural renewable energy (RE) provision into positive economic outcomes for MSMEs. Those positive outcomes (i.e. increase in product outputs, improved product quality and increased productivity) will result in income generation growth for MSMEs contributing to poverty reduction in rural areas of Nepal. 

PEUC has been envisioned as one of the major component of NRREP with an aim to initiate integrated approaches and strategy through nexus between energy and enterprises promotion. PEUC support to energize rural households and kick-start economic activities in catchment areas.

Khamari Khola MHP located north-west of Surkhet at Babiyachaur is widely regarded as the epitome of PEUC support intervention. The village of Babiyachaur is not only electrified by 53 kW it gets from the plant but it also thrives with bustling micro, small and medium-sized enterprises (MSMEs). This has improved the economic as well as social development and for an improved quality of life through opening new employment opportunities and increase income. In the recent year, the project shows a significant rise in consumption and equivalent collection of revenue thereby increasing the load factor of the plant. 

It indicates an effective management and sustainability of the project. Capitalizing on the steady stream of reliable electricity, local entrepreneurs have started all sort of business activities. 25 MSMEs have been supported through PEUC that have been effectively making a big difference in the life of many people and addressing the needs of the villagers. The catchment area has a grill industry, a dairy enterprise, auto-workshop, agro- processing mills and all other many sort of enterprises, providing services, reducing physical drudgery, stimulating rural economic growth and decreasing emission footprint.

Better access to energy leads to better development outcomes, if a supportive enabling environment and regular business development supports are provisioned. Energy and productive use should not be think in isolation and is a fundamental tenet for long-term sustainability of the renewable energy technologies.

    ----Bikash Uprety is a Technical Advisor at Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH