The EUR 2.7 million (NRs 254 million) micro-hydro component aims at continuing,  increasing and sustaining the availability of electricity in areas through mini-grid projects in the foreseeable future. Due to the dispersed settlement of a majority of the rural population in areas with difficulties of access, the majority of the rural population lives in such areas.

Micro hydro component is one of the five components supported by ESAP. This component is involved in promotion of appropriate institutional, organisational and regulatory frameworks with a view to facilitate development of cost effective and appropriate (Technical and Social) isolated mini-grids.  Where, mini-grid is defined as " an independent network for the electrification with own generating capacity (one or several generators) and to serve the local demand."  Mini-Grids may be operated locally in isolated mode like the present micro-hydropower or may be connected to the national grid.  Mini-Grids can be made of various generators, transformers, and lines with different voltage levels, including 1.1 kV lines.

Mini-Grid Support Programme (MGSP), is a management unit under AEPC/ESAP. MGSP manages the programme activities of the Micro-hydro Component. Among many programmes run by AEPC/ESAP, Mini Grid Support Programme (MGSP) aims to promote and support the micro-hydro power supply for isolated and scattered settlements which are not connected to the national grid. At present MGSP has institutional linkage with Rural Energy Fund (REF), which is a functional unit providing subsidy to alternate energy technologies like micro hydro and solar energy. The present subsidy policy allows MGSP to support the hydro power schemes up to 500 kW including the pico units such as Peltric set.

Updated: 29 Nov 2006