On the 26th of March 1999 an agreement on an Energy Sector Assistance Programme (ESAP) was signed between HMG/N and GKD with a total budget of 154 million DKK. The total ESAP period is expected to be 15-20 years. The Alternative Energy Promotion Centre (AEPC) and Nepal Electricity Authority (NEA) are the national agencies for the programme. Physical outputs of Phase I including successive bridging periods and no-cost extensions has reached more than 1.5 millions people benefited from improved cooking stoves, electric lights (solar home system and micro hydro).  In addition, the project has made a substantial investment in capacity building at field, manufacturing, financial sector and at the central policy level which is expected to have a long time bearing in the development of rural energy in Nepal.The activities in the Phase I were executed by private commercial sector operators and by NGOs.

ESAP is launching Phase II for next five years (2007-11) with realigned development objective

Improve the living conditions of the rural population by enhancing their access and affordability to rural energy solutions that are environment-friendly and that address social justice.

The immediate objective is to see that Regulatory and institutional arrangements are in place, technological solutions are available with quality assurance according to income strata, and credit facilities are available to promote investments.

For the next five years phase, the ESAP will have five components:

Institutional Support to Rural Energy Sector

Biomass Energy

Mini Grid (Micro Hydro) Development

Solar Energy

Financial Assistance to Rural Energy Investments: Rural Energy Fund

The Alternative Energy Promotion Centre (AEPC) is the executing agency of the programme and implemented by the ESAP Programme Office. The components are implemented at field level by communities, private commercial sector and by (I)NGOs.

Updated: 16 Nov 06