Being off the grid does not mean being powerless

Jun 23, 2017

The micro-hydro power plants are easy for local people to install and maintain. Bhim Bikram Malla manages the plant in the community of Darbang.

Taking a look at the strides made by UNDP in extending energy access to rural poor people and
in formulating appropriate policies for energy promotion

High in the mountains of Nepal, rivers and streams are common—but connections to the national electricity grid much less so. Among the 60 percent of Nepalese who live in rural areas, more than a quarter still need to be connected to electricity. In isolated villages perched high on mountain tops, the chance of the grid reaching them is unlikely, however, at least in the near future.

The lack of electricity inhibits people’s ability to thrive. It leaves them dependent on fuels such as wood and animal dung, which pollutes the air and strips trees from local hillsides, on top of requiring many long hours for collection, mostly by women and girls. Small local businesses have few options to expand their operations through electrically powered technology. Children lag behind in school because once the sun goes down, they lack sufficient light for studying.

Solving the power gap, given Nepal’s many challenges, from rugged terrain to limited financial resources, is a complex problem, but progress is happening. In some of the poorest and most remote areas of the country, the lights are going on, and slowly but surely, people’s lives are being transformed.


Starting over two decades ago, UNDP began working closely with the Government of Nepal’s Alternative Energy Promotion Centre to “electrify” remote villages. Despite a lack of energy infrastructure, Nepal’s copious water resources in thousands of rivers and streams offered a way forward.

UNDP and national technical experts came together to survey the situation, and realized there was enormous potential for harnessing energy with micro-hydro power plants that could be situated on local streams and rivers, many of which ripple from high elevations. The plants are constructed with accessible, locally available technology, and are easy for local people to install and maintain. Energy stored in rushing water is converted to electricity to power household appliances and small businesses, boosting the local economy and reducing drudgery.

Before a micro-hydro plant came to the village of Duni in Far Western Nepal, for instance, people had to walk one day to reach the nearest mill to extract cooking oil from mustard seeds. With electricity, one villager, Keshar Singh Saud, set up a small agro-processing mill that produces oil and processes rice, the local staple. He earns additional income—and feels proud that he can serve his neighbours.

Padma Devi Khadka of the same village is glad that the days of spending hours walking to obtain oil have passed. “We never thought that our village would be like this in the past,” she says. “The power has changed our lives.” Among other improvements, local women now have more time to earn incomes, such as through raising poultry and goats.

1Having access to power means a woman can use an electric grinder at her shop; it is among several small businesses in the rural district of Myagdi that have benefited from the local micro-hydro plant


In other villages, micro-hydro plants have allowed schools to introduce computers, improving attendance by students and the quality of their learning. One village set up an FM radio station, providing news and entertainment. Others are pumping water to irrigate fallow lands, resulting in dramatic increases in income through production of high value crops like beans and garlic. Small businesses have sprung up to provide services such as photocopying and electronics repair.

The combined efforts of the people, Government and development partners have now led to the installation of more than 2,500 micro-hydro plants across rural Nepal. They provide electricity to 300,000 households, and have helped over 2,000 micro- and small enterprises get off the ground. The establishment of each plant involves training the community on how to use and maintain it, building new skills in planning and managing local resources. This demonstration of community capabilities in turn has persuaded national policy makers of the feasibility and value of rural energy projects, and resulted in increased government financial support.

In 2006, Nepal adopted a landmark Rural Energy Policy that assigned a central role to local governments in promoting renewable energy technologies for rural electrification. Supplying electricity to rural areas has now become a top national development priority, with the Government recognizing power shortages as one of the greatest obstacles to development. Environment, energy and climate change sections have been set up in all 75 districts to help local governments play active roles in advancing the uptake of renewable energy, including through micro-hydro plants, solar systems, and improved stoves for clean and efficient cooking.

“UNDP has helped both in extending energy access to rural poor people and in formulating appropriate policies for energy promotion,” says Dr. Ram Prasad Dhital, Executive Director of the Alternative Energy Promotion Centre.


With the success of the micro-hydro plants now well-established, and given that energy access is central to Nepal’s development agenda, UNDP has begun encouraging a process of scaling up and diversifying the types of technology being deployed. Power sources capable of greater output can serve more people, lower maintenance costs and provide enough juice for local enterprises to expand their operations and become more productive.

Two options to move forward include 100-kilowatt-plus mini-hydro systems, with greater output than the micro-hydro plants, as well as larger solar photovoltaic systems. In some cases, mini-grids can link existing micro-hydro generators, boosting the power supply. Barriers to these solutions are substantial, however, including high initial investment costs, and a lack of technical capacity and awareness. The difficulties in moving from micro-hydro to mini-hydro are not so significant as to be insurmountable, however, as might be the case with very large-scale infrastructure.

Actions to overcome the obstacles are unfolding on a number of fronts, such as through developing an appropriate public-private sector model that combines different sources of finance and expertise. This work takes place through the Central Renewable Energy Fund, created in 2015 to work with banks and financial institutions on funding projects, and to help connect manufacturers and installers of mini-hydro and large solar photovoltaic systems to financing.

The 2016 Renewable Energy Subsidy Policy, drafted in part with UNDP assistance, contains provisions to support private developers and opens up subsidies for energy services. Reducing start-up costs is being achieved in part by identifying domestic manufacturers who, with some initial technical support and financing, can produce components for different systems to generate power. Demonstration projects are geared towards showing how larger systems can be cost-effective, particularly through the boost they deliver to local economies. As local enterprises grow through greater energy availability, they consume more, contributing to the financial sustainability of new systems.

Nepal’s huge strides in rural electrification in the last decade have included the extension of the national grid by the Nepal Electricity Authority. In some communities, when the grid has arrived, micro-hydro plants have been abandoned. To help make the best use of all resources, UNDP and the Alternative Energy Promotion Centre have helped connect the plants in mini-grids, working with private companies and local financial institutions on more than 100 such systems.

A landmark decision by the Nepal Electricity Authority that set technical standards to open grid connections to micro-hydro plants has already led to the signing of power purchase agreements with two of them. This provides an opportunity to sell unused electricity and generate revenues to sustain their operations, as well as to purchase power when local supplies are low, enhancing reliability and quality.

Further support for managing supply and demand and avoiding duplication comes from local planning. In central Nepal, the district of Gorkha is piloting the country’s first District Electrification Master Plan. It provides an overview of all available energy resources and helps define how these can be most effectively used, in terms of both cost and broad access. The plan should show the way for other districts, towards the day when all people in Nepal, regardless of where they are, have access to power.

This case study was published as part of the 10 Solutions to Help Meet the SDGs in Asia and the Pacific, published by UNDP Region Bureau for Asia and the Pacific.

The full report is available for download HERE

UNDP Around the world

You are at UNDP Nepal 
Go to UNDP Global