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  • Mr. Ram Prasad Dhital Executive Director

    Alternative Energy Promotion Center/Ministry of Population and Environment, Nepal

    LDC Renewable Energy and Energy Efficiency Initiatives (LDC REEEI)

    A case from Nepal

  • Presentation Outline

    • Status of Energy Access in LDCs

    •Global Initiatives and Actions Undertaken to improve access

    •Need & Impact of Energy Finance for LDCs

    • Barriers and Challenges

    • Case: Impact of AEPC on Nepal

    •Way Forward

  • Energy Poverty in the World

    1.2 Billion Population is Without Electricity Access (WEO 2016)

    2.7 Billion People rely on Inefficient Cooking (WEO 2016)

    730 Million People live on less than $ 1.90 a day (World Bank 2015)

    663 Million People live without safe drinking Water (WHO 2016)

  • Access in Least Developed Countries

    • United Nations designates 48 Countries as Least Developed Countries (LDCs)

    • Between 1971 and 2013, Per Capita Energy Use in LDCs increased by only 12.5 %, compared with 169 % across ODCs (WB 2016)

  • More Than Half of 1.2 Million Population Without Electricity Access

    Live in LDCs

    4 out of 5 Lack Access to Electricity

    9 out of 10 Lack Access to Modern Cooking

    Ranked 35 LDC Countries in the bottom 40 based on Energy Access, Energy Efficiency & Renewable Energy

    Identified 16 LDC Countries out of 20 as High Impact Countries

  • Access By Region




  • Global Initiatives

  • Special Initiative for LDCs “Only initiative catering specifically to the needs of the world’s poorest countries”

    Two Limbs

    --Strengthen capacity of LDCs to tap into existing initiatives, including AREI--

    --Provide support to those who fall within cracks in current frameworks--

    -- Increase Share of RE in National Production & Consumption -- Increase RE Producers in National Grid & Mini Grids – -- Engage RE Enterprises – Increase Level & Specificity of RE Components in Nationally Determined Contributions --

  • Priority Action Areas • Stocktaking existing activities and experiences

    • Strengthening national policies and regulatory


    • Access to financial resource and investment for

    renewable energy and energy efficiency

    • Transfer of technologies and technology assessment

    • Capacity building

    • Multi-stakeholder engagement and participation

    • Outreach and communications

    • Monitoring, assessment and continuous improvement

  • Key Periods and Governing Arrangements

    • Launch: COP 22

    – one of the key, concrete outcomes of the Marrakech climate conference

    • Period 1: 2017-2020 – initial mapping of opportunities, strengthening of regulatory and incentive frameworks; implementation of initial project/programme pipeline

    • Period 2: 2020-2030 – full implementation of the initiative, rapidly scaling up renewable energy to be substantial fraction of energy capacity in LDCs

    • Steering committee

    • Technical working group

    • Secretariat and implementation unit

    • Trustee


  • Estimate of Total Investment Needs to reach Universal Access by 2030

  • USD 14.1 Bn approved for International Public Climate Finance

    USD 5.6 Bn allocated for Energy Projects and Programs

    IIED, 2016

    USD 0.3 Bn allocated for Low Income Countries


    • LDCs receive less than USD 300 Mn in Energy Finance

    • Almost half of this, USD 118 Mn focused on decentralized energy solutions including mini-grids and off-grid energy

    • Nearly, 90 % of the total grid-tied energy investment in low income countries are spent across three countries: Ethiopia, Tajikistan and Kenya

    • Even, middle income group countries such as India and Ukraine received finance for decentralized energy

    “Middle income countries are less in need of grant based public finance as they can potentially raise significant capital from private sources of



    • Economic – High Cost of Capital, Limited Market Size, Limited

    Access to Finance • Socio-Cultural, Political & Institutional – Political Instability, Regulatory Uncertainty, Currency

    Risk • Investor Returns – Longer Returns, Limited Commercial Finance • Climate Funds – Preference for Loans, Large Sized Projects



  • Alternative Energy Promotion Centre  Central Agency for RE Promotion Member Secretary for Access

    component (SEforAll) • Country Action Agenda • Investor Prospectus

    Recommended for GCF accreditation New initiatives for PPP - Reverse auctioning,

    Best Available Technology (BAT), Incentive to Energy Services etc.

    Benefitting More than

    3.6 Million Households From Over

    35 MW RETs

    In the last 20 Years of AEPC, Renewable Energy Mix Growth increased from 0.15% in 1996 to 2.67% in 2016

    8 CDM Projects registered in UNFCCC

    USD 1.2 Million CERs Generated

    USD 6.7 Million Revenue Generated till date

    1500 %

  • Creating Enablers for Financing Energy Access in Rural Nepal

    Support in Policy Formulation, Planning and facilitating Implementations

    with Innovative Approaches – SPV, ESCO

    Technical Intermediary between Governments/Donors and

    Financial Intermediaries – Banks, MFIs, NGOs, DDCs, Technology Providers

    CREF to steer funding for Decentralized RE via

    Commercial banks and Micro-finance

    Channelize Finance for RE Investment to

    Households and Communities



    • Enact Supportive Policies – Tax incentives to support deployment of RETs – Reformation of Subsidies for Sustainable Development – Loan Guarantees for Small & Medium RE Developers and Service

    Providers – Effective Government Oversight and Regulations

    • Building Capacity – Training & Learning Exchanges for Regulators, Policy Makers & Energy

    Planners – Business Development Assistance for Private Sectors

    • Promote Investment – Design Ease-to-Understand and Ease-to-Access Climate Finances – Flexible and Fit-for-purpose instuments – Support LDCs in Developing Applicable Market Instruments

    Identify 15 LDCs as part of the 20 ‘fast-moving’ countries

  • Energy Finance for Sustainable Impact • Local Savings Group

    • Government Subsidy

    • Loan

    • Retailer Finance Scheme

    Energy User

    • Concessional Loans

    • Market-rate Loans

    • Equity

    • Result Based Financing/ Business Model Innovation

    Energy Provider

    • Grants

    • Concessional Loans

    • Credit Guarantees

    Financial Institutions

    • Grants & Loans from Development Finance Institutions

    • Domestic Taxes




  • There is A Larger, Quicker and Critical Role to Play

    Based on World Energy Outlook 2016, an estimated

    1.2 Billion Population is Without Electricity Access And

    2.7 Billion People rely on Inefficient Cooking


    For further communication:

    Ram Prasad Dhital

    Executive Director

    Alternative Energy Promotion Centre

    Khumaltar, Lalitpur

    P.O. Box 14364, Kathmandu, Nepal Tel. No.: +977-1-5539390, 5539237 Extn. 235

    E-mail: ram.dhital@aepc.gov.np


  • Q&A

    • Easy to process application for the receipt country based on the commitments under the Paris Declaration to “Implement, where feasible, common arrangements at country level for planning funding, disbursement, monitoring, evaluation and reporting to government on donor activities and aid flows” (OECD, 2008: para. 32)

    • Engage private businesses and investors

    • Developing innovative relationships with financial institutions active in renewable energy