The World Bank today approved Strategic Climate Fund (SCF) Grant in the amount of $5.61 million and SCF Loan in the amount of $2 million to help Nepal diversify its energy sources to renewable. The SCF grant and credit support the private sector-led Mini-Grid Energy Access Project, which aims at mobilising energy-service companies in selected regions of the country to increase 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 World Bank senior energy specialist and task team leader of the Project Subodh Adhikari. "The second component will provide technical assistance to the mini-grid sector, energy-service companies and partner banks to ensure smooth and sustainable implementation," he added.
The Project is aligned to the efforts of the government to address barriers to private sector participation in the renewable energy mini-grid sector. The Project will aim to address these barriers by successfully demonstrating new approaches that will promote public-private partnerships (PPPs). Private entities and cooperatives will be mobilised to provide electricity services to rural areas as 'energy service companies' (ESCOs). These specialised ESCOs will crowd-in 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 the 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 World Bank country manager for Nepal Faris Hadad-Zervos. "It is directly linked to the Nepal government’s effort for greater private sector management and commercial financing through public-private partnerships, and the World Bank’s mission of maximizing all financial opportunities for development,” he added.
The Project aims at improving the overall energy supply situation in Nepal by promoting renewable energy solutions, including the opportunities to capture private sector efficiencies through PPPs. This is consistent with the World Bank Nepal’s Country Partnership Framework (CPF) that has identified unavailability of energy supply to be one of the major obstacles in investment, productivity, and livelihood opportunities. The Project will introduce conditions to gradually shift from subsidised model to a commercial business model in mini-grids, pushing for a vibrant and long-term energy market to combat it.
While enhancing the market, the Project ultimately aims at supporting rural residential and nonresidential customers, who will gain access to new or improved energy services in rural areas through 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 World Bank senior energy specialist and task team leader of the Project Subodh Adhikari. "The second component will provide technical assistance to the mini-grid sector, energy-service companies and partner banks to ensure smooth and sustainable implementation," he added.
The Project is aligned to the efforts of the government to address barriers to private sector participation in the renewable energy mini-grid sector. The Project will aim to address these barriers by successfully demonstrating new approaches that will promote public-private partnerships (PPPs). Private entities and cooperatives will be mobilised to provide electricity services to rural areas as 'energy service companies' (ESCOs). These specialised ESCOs will crowd-in 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 the 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 World Bank country manager for Nepal Faris Hadad-Zervos. "It is directly linked to the Nepal government’s effort for greater private sector management and commercial financing through public-private partnerships, and the World Bank’s mission of maximizing all financial opportunities for development,” he added.
The Project aims at improving the overall energy supply situation in Nepal by promoting renewable energy solutions, including the opportunities to capture private sector efficiencies through PPPs. This is consistent with the World Bank Nepal’s Country Partnership Framework (CPF) that has identified unavailability of energy supply to be one of the major obstacles in investment, productivity, and livelihood opportunities. The Project will introduce conditions to gradually shift from subsidised model to a commercial business model in mini-grids, pushing for a vibrant and long-term energy market to combat it.
While enhancing the market, the Project ultimately aims at supporting rural residential and nonresidential customers, who will gain access to new or improved energy services in rural areas through renewable energy mini-grids.
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