Empowering Micro Hydro Plants in Nepal

Large numbers of micro-hydro plants installed in Nepal have fallen short of their potential to achieve a lasting impact on rural people’s livelihoods. This is because most of them are unable to generate sufficient revenue to cover even minor operation and maintenance costs and, as a result, they have to close down for indefinite periods when repairs are required.

In this context, Winrock International implemented the SEPS exchange activity Sharing Learning Across Projects: Operating Micro Hydro Plants (MHP) as Commercially Viable Enterprises. They organised for successful plants to share best management practice with five financially and managerially weak micro-hydro plants in the Baglung and Gulmi districts.

The series of knowledge exchange workshops empowered management committees and local representatives to improve their managerial and financial systems and to develop their business plans, business models and computer-based accounting systems. The activities resulted in significant managerial improvement of the selected micro-hydro plants. These plants were able to provide a reliable power supply with a marked increase in revenue generation and to establish themselves as profitable enterprises.

After the interventions, electricity sales increased by up to 40%, additional households and enterprises became connected and productive end uses increased. The micro-hydro plants adopted transparent accounting systems and improved their tariff collection, resulting in greater satisfaction among beneficiaries and better ownership by stakeholders.

The project shows the huge potential for the government and other development partners to focus on improving the management of micro-hydro plants and increasing the reliability of electricity connections through similar knowledge exchange programmes for the remaining 2,000 micro-hydro plants across the country.

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