Nepal is currently experiencing an energy crisis of unprecedented severity. It ranks 53 out of 64 countries in the Energy Development Index (EDI) (0.102). Rural electrification stands at approximately 34 percent, but even urban areas face acute power shortages. Most of Nepal‘s total energy comes from traditional biomass fuels (87.1percent), while the remaining is derived from commercial (12.2 percent) and renewable sources (0.7 percent). Fuel wood is by far the largest energy source of total energy consumption (77 percent). These patterns of energy generation and consumption – coupled with difficult geographical terrain in hilly and mountainous areas, socioeconomic underdevelopment and a sparsely distributed population – present formidable challenges in providing modern energy solutions. It also limits socio-economic development, as unequal access to modern energy is closely correlated with wider inequalities in opportunities for human development. A number of related policies and programmes for expedited and equitable promotion of renewable and efficient energy systems spurred important market and technology improvements. As a result, decentralised clean energy has become more available with better performance and operating life and progressively less expensive. There is still significant unexploited potential ahead. Between 2010 and 2013, the Government of Nepal (GoN) aims to electrify an additional 7 percent of the total rural population through alternative energy sources and ―by the next 20 years, the share of renewable energy in total energy supply of the country will reach 10 percent and almost 30 percent of the people in the country will have access to electricity from alternative energy sources‖. This requires up-scaling current activities and replicating successful models. However, high upfront costs compared to traditional fuels, low purchasing power of poor people and lack of viable financing mechanisms are still major barriers to dramatically scaling -up access. In Nepal, where the microfinance sector is maturing, microfinance institutions are well placed to supply finance schemes tailored to the needs of poor consumers at scale . Currently, it is estimated that microfinance institutions collectively reach over 1.5m clients. The sector demonstrates features of a mature microfinance market through outreach (many of the larger microfinance banks reach over 100,000 clients), profitability (over 100% Operational Self Sufficiency) and good key performance indicators (Portfolio at Risk less than 30 days below 5% and case load of over 300 clients per field officer). Not least, it has access to a very mature wholesale financing market. At this stage, the growing challenge for MFIs is limited growth of their lending portfolio within the existing client base. Clean energy financing is a profitable and cost effective strategy for MFIs to introduce a new product to an existing client base in a market that has high-growth potential.
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Publisher:
CSDBP/UNCDF
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(2012
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Type / Script:
Official Document
in English
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Keywords:
CLEAN START , BUSINESS PLAN, SOCIOECONOMIC, DECENTRALIZATION, MICROFINANCE, RURAL ELCTRIFICATION, RENEWABLE RESOURCES, TRADITIONAL BIOMAS ENERGY, UNDERDEVELOPMENT, POLICIES and PROGRAMMES, HUMAN DEVELOPMENT, SITUTIONAL ANALYSIS, PROGRAMME STRATEGY, SUSTAINABLITY, MONITORING and EVALUATION, NATURAL RESOURCES DEVELOPMENT,RESOURCES CONSERVATION, ENERGY TECHNOLOGY, PETROLEUM EXPLORATION, ENERGY SERVICES, GAS EXTRACTION
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Thematic Group:
UNCDF
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Capital Development
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Thesaurus:
03.10.00
- Energy Resources
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Reference Link:
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