Paper

Potential of Solarhomesystems, Biogas-plants and Micro-hydro in Nepal and Opportunities for MFI

Improving access to renewable energy technologies in rural areas
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This paper describes the role of the Alternative Energy Promotion Centre (AEPC) in developing the renewable energy technologies (RET) sector in Nepal. It also discusses opportunities for MFIs to become key players in financing this sector.

Renewable energies have a long track record in Nepal. AEPC is promoting RET in Nepal’s rural areas to further its growth. Providing energy to rural households would raise living standards and would be the basis for education, health, economic growth and overall development. RET is, however, a costly undertaking and many users cannot afford its initial cost. MFIs can play a role here by lending to households for installation of solar home-systems or biogas plants. Entering the RET sector would help MFIs increase:

  • Business volume and organizational growth;
  • Outreach and competitiveness;
  • Sustainability and profit;
  • Professionalism and capacity building.

If demand for RET exceeds the financial capacity of an MFI, AEPC steps in to create MFI partnerships with urban banks. It also arranges to provide training and capacity building for MFIs.