Micro hydropower lifeline for villages soon

May 25, 2010 - The Kathmandu Post

The government will allocate additional resources to build micro-hydro projects with a capacity of 50-100 KW to provide electricity to every village in the country with the potential to generate electricity but without a power connection. Finance Minister Surendra Pandey said on Sunday that government resources would be made available to generate electricity through micro-hydro projects in such villages within the next three years.

Although foreign donors have been subsidizing micro-hydro, solar and other energy sources, this is the first time the government will be investing domestic resources to develop energy.

Donors such as Denmark and Norway have been providing support to alternative energy in the country.

"The government expects such projects will be developed with the participation of production cooperatives, the private sector, local people, village development committees and other institutions either on their own or collectively," Pandey told a meeting of the National Development Council that began on Sunday.

Against a backdrop of the ongoing extended load-shedding and big hydropower projects taking seven to 10 years to be finished, the government has decided to promote small hydropower projects.

Bodh Raj Niraula, chief of the budget department at the Finance Ministry, said that discussions were going on to allocate a budget on the part of the government for micro-hydro projects in every VDC with water resources capable of producing electricity but not connected to a power grid.

As per the Rural Electricity Subsidy Policy 2009, the government will provide a subsidy of Rs. 12,000 per household for new micro- hydro projects of up to 5 KW. However, the subsidy will not be more than Rs. 97,500 per KW generated.

There is a separate subsidy policy for add-on micro-hydro projects, rehabilitation of existing projects and transportation equipment meant for micro-hydro projects.

According to the annual report of the Alternative Energy Promotion Board, 30,376 households had access to electricity as of the end of the last fiscal year with micro-hydro projects.

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