Kathmandu, April 23 : The government and the World Bank have inked an agreement with an aim to scale up renewable energy options in selected regions of Nepal in partnership with private sector.
The deal was signed by Shreekrishna Nepal, joint secretary at Ministry of Finance and Bigyan Pradhan, acting country manager of the World Bank.
A total of $17.21 million will be spent during four-year period under the private sector-led Mini-Grid Energy Access Project, of which the World Bank will finance a total of $7.61 million through its Strategic Climate Fund (SCF), comprising grant of $5.61 million and soft loan of $2 million, according to the agreement. Likewise, the government will contribute a subsidy of $6 million and the remaining $3.6 million will be arranged by the private sector.
The project aims to provide renewable energy to 126,000 rural people and support more than 80 businesses through micro/mini-hydro and solar sub-projects in Nepal’s rural areas. The project will be implemented by the Alternative Energy Promotion Centre (AEPC), the government’s nodal agency for renewable energy promotion in Nepal.
Under this project, private entities and cooperatives will be mobilized to provide electricity services to rural areas as ‘energy service companies.’ These specialized companies will crowd-in financing capacity to develop, build, own and operate renewable mini-grid projects.
The project is also expected to support more than 25 mini-grid sub-projects and add new generation capacity of 3.8 megawatts while rehabilitating and restoring the capacity of existing mini-grids.
