Nepal: Increasing Access to Energy in Rural Nepal

Sovereign Project | 43299-012

Summary

The TA supports ADB's Energy for All Initiative, which develops new approaches for scaling up access to energy for the poor, in line with ADB's commitment to inclusive and environmentally sustainable growth.

The TA will pilot test the SMB approach to increase the number of improved water mills by helping poor households gain access to local financing, technology, and know-how to enable financially viable but nonbankable projects to become bankable. The key feature of the SMB approach is the establishment of a revolving fund to provide a menu of "gap-filling" finance (e.g., equity, debt, bridge financing, lease-toward-purchase, and partial credit guarantees) to entrepreneurs to mobilize local financing for income-generating, small-scale energy investments.

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Project Name Increasing Access to Energy in Rural Nepal
Project Number 43299-012
Country Nepal
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7504-NEP: Increasing Access to Energy in Rural Nepal
ATF Second Denmark Renewable Energy US$ 510,000.00
A.T.F. - Finnida Grant US$ 100,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector Energy - Renewable energy generation - small hydro
Gender Equity and Mainstreaming
Description

The TA supports ADB's Energy for All Initiative, which develops new approaches for scaling up access to energy for the poor, in line with ADB's commitment to inclusive and environmentally sustainable growth.

The TA will pilot test the SMB approach to increase the number of improved water mills by helping poor households gain access to local financing, technology, and know-how to enable financially viable but nonbankable projects to become bankable. The key feature of the SMB approach is the establishment of a revolving fund to provide a menu of "gap-filling" finance (e.g., equity, debt, bridge financing, lease-toward-purchase, and partial credit guarantees) to entrepreneurs to mobilize local financing for income-generating, small-scale energy investments.

Project Rationale and Linkage to Country/Regional Strategy ADB's country strategy and program (CSP) for Nepal is focused on providing access to economic opportunities to foster-based growth, with a special focus on the needs of the poor and excluded in rural areas.
Impact Access to sustainable, reliable and affordable modern energy services improved in target communities in Nepal
Project Outcome
Description of Outcome Results of social merchant banking (SMB) approach to financing improved water mills demonstrate the viability of scaling up access to energy projects
Progress Toward Outcome Implementation is ongoing. The TA consultants have identified geographical areas to benefit from SMB financing through the IWM program. These will be engaged and targeted upon the establishment of the revolving fund. The Clean Energy Development Bank (CEDB) was selected as the host of the revolving fund through competitive procedure and pursuant to the criteria stipulated in the TA.
Implementation Progress
Description of Project Outputs

SMB model piloted in some IWMP districts

Capacity built among local partners, e.g., entrepreneurs and microfinance and financial institutions, to implement sustainable energy service delivery programs

Revolving fund capitalized and deployed on a pilot basis to provide gap-filling finance for energy service investments.

Status of Implementation Progress (Outputs, Activities, and Issues)

Both the international consultant, with direct experience in applying the social merchant banking approach, and the national consulting firm - CRT/N are officially on board.

Minor changes in implementation arrangement were approved by Director, SAEN on 26 Feb 2013 to reflect the following: (i) CEBD as the host of the revolving fund; (ii) APF in lieu of IA; (iii) reallocation of TA funds; and (iv) extension of TA closing till 30 Oct 2013.

Geographical Location Rural Nepal
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Consultation with project stakeholders will be an important part of project implementation. These will be consulted through design and into implementation.
During Project Implementation Consultation with stakeholders will continue throughout implementation of the project.
Business Opportunities
Consulting Services The TA will require a total of 29 person-months of international and national consultancy services. This will include the services of 1 international small-scale infrastructure financing expert for 9 person-months, who will be selected as an individual consultant directly or through a firm. It also requires a total of 20 person-months of national consultancy services to be provided by the Centre for Rural Technology, Nepal (CRT/N), which will be engaged as a national consulting firm on the basis of single-source selection and biodata technical proposal. The combination of international and national consultants retained were engaged by ADB in accordance with its Guidelines on the Use of Consultants (2007, as amended from time to time).
Responsible ADB Officer Hongwei Zhang
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Alternative Energy Promotion Center (AEPC)Khumaltaar Heights
Lalitpur Sub Metropolitan City
Nepal
Timetable
Concept Clearance 03 Jul 2009
Fact Finding 15 Jul 2009 to 22 Jul 2009
MRM -
Approval 05 Mar 2010
Last Review Mission -
PDS Creation Date 17 Mar 2010
Last PDS Update 31 Mar 2014

TA 7504-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Mar 2010 08 Apr 2010 08 Apr 2010 31 Oct 2012 30 Oct 2013 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 610,000.00 170,000.00 0.00 0.00 0.00 780,000.00 05 Mar 2010 169,215.97

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Safeguard Documents

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Evaluation Documents

See also: Independent Evaluation

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