Wednesday 24th April 2024
The World Bank (WB) approved the Strategic Climate Fund (SCF) grant and SCF Loan of USD 5.6 million and USD 2 million, respectively to help Nepal channel its energy sources for renewables on February 01, 2019.
The SCF grant and credit will support Nepal’s private sector-led Mini-Grid Energy Access Project, aiming to mobilize energy-service companies in select Nepal regions for increasing the capacity of renewable energy mini-grids.
“One component of the project will provide credit facility to the private sector to support renewable mini-grid sub-projects, and help this sector prosper and expand,” said Subodh Adhikari, World Bank Senior Energy Specialist and task team leader of the project.
The second component will provide technical assistance to energy-service companies, Nepal’s mini-grid sector and partner banks to facilitate smooth project implementation, adds Adhikari.
The Nepal government is using the project to ease private-sector participation in the renewable energy mini-grid sector and remove any barriers obstructing participation by introducing new approaches that will promote public-private partnerships.
Likewise, private entities and cooperatives will be utilized to provide electricity services to Nepal’s rural areas as ‘energy service companies’ (ESCOs).
These ESCOs will bring together the necessary technical expertise and financing capacity to develop, build, own and operate renewable mini-grid projects.
They will have access to better credit terms and stronger project development support through project.
“This project will tap into the vast business opportunities and technical potential for the private sector to provide more efficient and sustainable energy services in Nepal,” said Faris Hadad-Zervos, World Bank Country Manager- Nepal.
Zervos adds that the project is directly linked to the Nepal government’s effort for greater private sector management and commercial financing through public-private partnerships and the World’s Bank mission of all increasing all financing opportunities for the country’s development.
The project ultimately aims to support rural residential and non-residential customers, who will gain access to new or improved energy services in rural areas through renewable energy mini-grids.
