As the climate crisis intensifies, the global search for sustainable and clean energy solutions has become more urgent than ever. Marked by a steady rise in global average temperatures and increasingly erratic weather patterns, climate change has become the defining challenge of our time for all countries, including Nepal and the whole of South Asia.
A major cause of climate change is the global dependence on fossil fuels. Thus, to mitigate greenhouse gas emissions, it is imperative that countries transition to clean, renewable energy systems, earlier than later. In this regard, green hydrogen—produced via water electrolysis powered by renewable energy—has emerged as a potential critical enabler for countries worldwide to transition toward net-zero economies.
Nepal currently generates around 3,000 MW of hydropower, with plans to expand capacity to 28,500 MW within a decade through $ 46.5 billion in public and private investments. With hydroelectricity recognised as a priority sector by the government, there are credible grounds to foresee potential in leveraging surplus electricity towards making green hydrogen a transformative energy alternative. Additionally, specialised research institutions such as Green Hydrogen Lab at Kathmandu University has been working to develop necessary technologies to support this transition. This represents a major opportunity to engender clean industrialization domestically, diversify energy exports, and support a regional clean energy transition, according to South Asia Watch on Trade, Economics and Environment (SAWTEE).
Against this background, Senior Fellow at the Madhu Marasini and Economist at SAWTEE Prajol Joshi has prepared an issue note on “Green Hydrogen in Nepal: Unlocking a sustainable energy future”. To this, SAWTEE and the WTO Chairs Programme–Nepal at the Kathmandu University School of Management (KUSOM) jointly organized a stakeholder discussion programme to discuss the prospects of green hydrogen in Nepal, ongoing developments in the sector at global and regional levels, the challenges, and the way ahead.
In his trigger presentation Marasini, on the occasion, highlighted that energy today is more than just a resource; it has become a key tool in foreign policy and international trade. Energy diplomacy now plays a vital role in global political relations, highlighting the need for stronger coordination between nations.
Likewise, Team Leader of the Green Hydrogen Lab at KU Dr Biraj Singh Thapa emphasised that hydrogen continues to gain momentum globally, unlike in past energy transitions, Nepal is progressing in parallel with other countries, both developing and developed, in key areas such as research, human resource development, and other. "This presents a valuable opportunity for Nepal to build a hydrogen economy that reflects its specific needs and strengths."
Executive Director at the Alternative Energy Promotion Centre (AEPC) Nawaraj Dhakal remarked that green hydrogen is gaining attention in Nepal, with its inclusion in NDC 3.0 and the national budget. But awareness is still low. The government, academia, and private sector must work together to implement the policies to support adoption of green hydrogen with a clear roadmap.
Similarly, joint secretary at the Ministry of Forest and Environment Dr Maheshwar Dhakal said that green hydrogen has been included in Nepal’s NDC 3.0, signaling a shift toward sustainable energy and reduced reliance on imported fossil fuels. "Strengthening academic collaboration by Nepali Universities with Universities in China and India can support and accelerate progress through shared knowledge and research," he added.
Executive Member of the Independent Power Producers’ Association of Nepal (IPPAN) Suman Joshi, on the occasion, stated that government needs to subsidise backward and forward linkages and processes for the promotion of green hydrogen within Nepal. "That will greatly encourage private sectors to invest in green hydrogen as it can also be considered a value addition to hydropower generation," she added.
Joint secretary at the Water and Energy Commission Secretariat Sandip Kumar Dev said that to build public awareness and trust towards green hydrogen, we need to demonstrate real projects, at least through pilot projects. "The government must create supportive environment for encouraging the private sector to make investments in the sector," he said.
Likewise, vice chancellor of Kathmandu University (KU) Prof Dr Achyut Wagle stated that KU, as an academic institution, is ready to play its role in developing necessary human resources and technical innovations. "We aim to partner with utility companies, municipalities, and the private sector to drive component-based projects, despite technical challenges," he added.
Chair Emeritus of SAWTEE Dr Posh Raj Pandey concluded the programme by stating that there is a need to assess the supply and demand of green hydrogen to better understand its eco system. He further emphasised the need to be aware of hydrogen leakages while developing the ecosystem.
Participants included policymakers, academics, journalists, energy experts, industry stakeholders, and members of civil society.
Monday, July 14, 2025
Green Hydrogen in Nepal: Unlocking a sustainable energy future
Saturday, October 31, 2020
AEPC, NEA seal a deal to construct mini-grid
Alternative Energy Promotion Centre (AEPC) and Nepal Electricity Authority (NEA) signed an agreement to construct a mini-grid with a capacity of 1.624 megawatts (MW) connecting micro and small hydroelectricity projects unreached by the national grid.
AEPC’s executive director Madhu Sudan Adhikari and NEA Engineering Company director and NEA deputy manager Hitendra Dev Shakya, recently signed the agreement on behaf of their respective institutions.
The NEA Engineering Company and the AEPC signed the agreement aiming at carrying out the detailed feasibility study for the construction of a mini-grid by connecting the seven micro and small hydel projects being developed in Jumla of Karnali Province, a press note from the NEA reads.
The company will carry out the detailed feasibility study as well as the engineering design of the mini-grid project, the press note reads, adding that the AEPC will bear the financial cost. “Under the project, six projects developed with the AEPC’s grant assistance and one developed with NEA’s support will be connected to the mini-grid which will, in turn, be connected to the National Transmission Line.”
The 200-kilowatt (KW) Ghughuti Small Hydroelectricity Project at Chandannath Municipality in the district headquarters is constructed with the NEA assistance, whereas the 200-KW Girikhola Small Hydroelectricity Project at Tatopani Rural Municipality, the 100-KW Juwanadi Thinkebandh Micro Hydroelectricity Project at Chandannath Municipality and the 45-KW Triveni Micro Hydroelectricity Project at Patarashi Rural Municipality are being constructed with the assistance of AEPC.
Similarly, the 31-KW Luma Micro Hydroelectricity Project, the 50-KW Dillichaur Micro Hydel Project and the 198-KW Chukeni Khola Small Hydroelectricity Project are developed with AEPC support.
Wednesday, November 13, 2019
Nepal receives $39.3 million grant from Green Climate Fund
The 24th board meeting of the fund in Sangdo, South Korea today has approved the first funding proposal of Nepal, one of the most vulnerable countries to the impacts of the climate crisis. “The meeting has given the green signal to awarding a $39.3million grant to the project titled ‘Building Resilient Churia Region in Nepal (BRCRN),” according to a press note. “The current funding has been approved for the project which will be implemented on the ground to help climate-vulnerable communities and ecology to adapt.”
The project – that will last for 7 years – will be implemented by the Food and Agriculture Organisation (FAO), in partnership with the Ministry of Forest and Environment, in the fragile Chure range, which has faced massive degradation in the past.
The approved project – a multi-dimensional one as it not only talks about the resilience of vulnerable communities and conservation but also early warning systems – will help locals in adapting to the changing climate as the Chure range is a significant zone for the people living in the low-lying districts in Terai for its services like water and forest.
As a poor and mountainous country, at the higher risk of climate change and induced disasters, Nepal looks up to international support for climate actions – adaptation and mitigation – in order to gain resilience, and also to meet the Sustainable Development Goals (SDGs).
The Green Climate Fund (GCF) was set up in 2010 under the United Nations Framework Convention on Climate Change (UNFCCC) to support the efforts of developing countries to respond to the challenge of climate change.
According an NGO working for sustainable development and environmental justice in Nepal Prakriti Resources Centre, this is the first-ever that the GCF has extended such substantial funding to the country for climate change-related projects. ““In the past, we have achieved some funds from the GCF, but this is the first time the fund has approved Nepal’s funding proposal,” the NGO informed, adding that it is an important achievement for Nepal. Prakriti Resources Centre has been involved in international climate negotiations for years.
Nepal had also received fundings from the GCF twice in the past. First in In 2016, Nepal received a grant of $2.9 million – via the United Nations Environment Programme for preparing its National Adaptation Plans (NAPs) – under the GCF's Readiness and Preparatory Support Programme. The programme to enhance country ownership and access to the funds was also known as Asia’s first GCF-financed project at the time.
Secondly, Nepal received another funding from GCF’s Readiness Support that provides up to $1 million per country per year for strengthening the country’s institutional capacities to access the funds. “Approval of funding for the project for climate actions is a positive development for a climate change vulnerable country like Nepal,” according to GCF Readiness and Preparatory Support Programme under the Finance Ministry.
Nepal is currently preparing at least three projects for accessing grants from the GCF. WWF Nepal has been working on a project proposal which will be based in West Seti area. Likewise, the UNDP Nepal is working on a project proposal to safeguard lives and livelihoods against the project to protect lives and livelihoods against flood and glacial lake outburst floods (GLOFs) targeting finance from the Green Climate Fund.
International Union for Conservation of Nature-Nepal is also developing a project proposal for building ecosystem and community resilience which is likely to be submitted for approval in coming March, the first one to go for approval among others in the pipeline.
However, these all are international agencies-supported projects. Accreditation of Alternative Energy Promotion Centre, one of the four national entities nominated by the government in February to gain the GCF status, in February has given new hopes for the country that the government bodies can also apply for similar grants for climate actions projects.
The GCF accreditation to the AEPC means it can access up to $50million in GCF funds for low-carbon, climate-resilient development projects and programmes in Nepal.
Monday, September 9, 2019
Promoting Resilient Infrastructure in Nepal
“Nepal is one of the most vulnerable countries to disasters and the impact of global climate change,” World Bank country manager for Nepal Faris H Hadad-Zervos said, adding that the workshop is a valuable opportunity to support both the public and private sector to provide resilient and sustainable energy services in Nepal, especially successful off-grid electricity supply.
The workshop will bring together the expertise, technologies and best practices on resilient distributed generation from experts from Japan with the support of ‘Japan-World Bank Programme for Mainstreaming Disaster Risk Management in Developing Countries,’ funded by the government of Japan and managed by Global Facility for Disaster Reduction and Recovery (GFDRR).
The workshop will discuss disaster resilient micro-grid systems in Sendai and Maldives, building resilient infrastructure through Public-Private Partnerships (PPPs), and the future perspectives of resilient mini-grid system development.
“This is a unique platform for Nepali and Japanese experts to share learnings and find common solutions to build resilient infrastructure and disaster risk management in Nepal to benefit the country and its stakeholders,” said Junior Professional Officer of the World Bank Eriko Ichikawa.
The workshop will ultimately aim to support the country’s effort to improve the overall energy supply situation, through mobilising energy-service companies to increase capacity of renewable energy mini-grids, capturing private sector efficiencies through PPPs, and encouraging private capital investment in the sector, while ensuring the resiliency of the system.
Monday, April 22, 2019
Government, World Bank launch new project to scale up renewable energy options
Total of $17.21 million will be spent during four-year period of the Private Sector-Led Mini-Grid Energy Access Project, of which the World Bank will finance total of $7.61 million (approximately Rs 845.2 million) through its Strategic Climate Fund (SCF) comprising of SCF Grant of $5.61 million and SCF soft loan of $2 million. Similarly, the government will contribute subsidy of $6 million and the remaining $3.60 million will be contributed by the private sector. The project will provide renewable energy to 126,000 rural people and support more than 80 businesses through micro/mini-hydro and solar subprojects in Nepal’s rural areas. The project will be implemented by the Alternative Energy Promotion Centre (AEPC), the government's nodal agency for renewable energy promotion in Nepal.
"We are thankful for the support of the World Bank in launching this milestone project to encourage commercial financing of renewable and off-grid energy systems in Nepal," Nepal said, adding that the project will demonstrate that the private sector led model is feasible in mini-grid development and the government is committed to engage private sector in development.
Under the Project, 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 financing capacity to develop, build, own and operate renewable mini-grid projects. The commercial banks are a key partner who will assume credit risk of the subproject loans to ESCOs once they are eligible and selected to participate in the project by AEPC. The credit facility component of the project is in turn supported by a technical assistance component for stronger project development support to the mini-grid sector, ESCOs and partner banks to ensure sustainable implementation beyond the life of the project.
"Maximizing finance for development is an important element in Nepal’s growth trajectory,” said World Bank acting country manager for Nepal Bigyan Pradhan. "By encouraging the participation of the private sector, this project motivates a business approach to improve energy access while supporting the government’s efforts to provide clean and efficient energy options to rural communities," he added.
The government accords high priority on the renewable energy sector and the World Bank Group supports the government’s energy sector through investments in both grid and off-grid energy and energy efficiency programmes.
This project aims to support more than 25 mini-grid subprojects and add new generation capacity of 3.8 MW, while rehabilitating and restoring the capacity of existing mini-grids.
The improved policy environment through the government’s Renewable Energy Subsidy Policy 2016 and the effective implementation of this project are expected to create opportunities for this model to succeed in providing energy access to Nepal’s rural areas.
Friday, March 1, 2019
AEPC can access $50 million in GCF funds
The board meeting of the Green Climate Fund (GCF) – held on February 26-28 in South Korea – has approved the accreditation application for Nepal’s first national direct access entity, AEPC.
"This outstanding milestone for climate finance in Nepal is the result of the strong commitment of AEPC – the leadership of Nepal’s National Designated Authority (NDA) – to the fund, reads a press release issued by the Finance Ministry.
The programme is funded by the Government of Germany (BMU) and jointly implemented by the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP).
"This is a landmark moment for Nepal whereby a federal government institution has been accredited for direct access with the largest global fund on climate change," according to joint secretary at the Finance Ministry Shreekrishna Nepal, who is also NDA focal person at the ministry.
"This will help Nepal access and mobilise resources for low-emission and climate resilient projects,” he added.
"Despite the rigorous and stringent process, the centre was able to gain accreditation status with GCF," executive director of AEPC Madhusudan Adhikari said, adding that they are committed to accessing resources as per adaptation and mitigation priorities, aligned with our country’s national development strategies.
The government, through the NDA, had nominated four national entities through open competitive process by inviting applications to gain accreditation status. At the moment, National Trust for Nature Conservation (NTNC), Nepal Investment Bank and Town Development Fund are still in the pipeline for accreditation with GCF.
The GCF will help Nepal access the necessary finance to address climate change issues in the country, according to resident representative of UNDP Nepal Renaud Meyer.
Thursday, October 5, 2017
AEPC provides Rs 60 million to microhydro projects
AEPC is providing grant to complete maintenance of the damaged projects in 11 districts – Rasuwa, Nuwakot, Dhading, Gorkha, Kavre, Sindhupalchowk, Dolakha, Ramechhap, Sindhuli, Okhaldhunga and Makawanpur – which were highly affected by the natural calamity.
AEPC will continue its financial support to damaged projects until completion of maintenance process. According to the AEPC, micro hydro projects in Dolakha, Sindhupalchowk and Gorkha were highly affected by the earthquakes.
The AEPC is providing support for maintenance of micro hydro projects, with assistance from the United Nations Development Programme (UNDP) and Department for International Development (DfID). Likewise, fund from the government is also being utilised for maintenance of such projects.
"We are not directly involved in the maintenance process of the said projects," spokesperson for AEPC Nawa Raj Dhakal said, adding that the AEPC provides subsidy and the local community or consumer community of the project will handle the entire works.
AEPC has distinguished damaged projects in two categories; partially-damaged and fully-damaged. AEPC is sending grant through district coordination committee to projects for partially-damaged projects, whereas it directly sends the support amount to the project in the case of fully-damaged projects.
Likewise, AEPC – a government institution formed with an objective to develop and promote renewable and alternative energy technologies in the country – has also assisted the maintenance process of more than 5,000 biogas plants affected by the same natural disaster in Kavre and Gorkha districts. Likewise, it has started a study to assist the biogas plants in Nuwakot and Rasuwa districts.
Friday, November 14, 2014
ADB, Norway to help Nepal overcome crippling power shortage
The project’s lead donor, the Asian Development Bank (ADB), will administer the Norwegian aid.
The project aims at increasing electricity access and help overcome power shortages in Nepal besides exporting surplus power to neighbouring India by strengthening and increasing the power transmission capacity and network in the country. It is by far the largest single project support by Norway to the energy sector of Nepal, according to the ADB.
The ADB and Norwegian Ministry of Foreign Affairs signed a co-financing agreement today.
Joint secretary of the Finance Ministry Madhu Kumar Marasini and ADB country director Kenichi Yokoyama signed the grant agreement in the presence of Norwegian ambassador Pettersen at the Finance Ministry, here today.
"We believe that the project will leverage private sector investment and extend access to energy services in Nepal," said Norwegian Ambassador to Nepal Kjell Tormod Pettersen during the signing of the co-financing agreement with ADB.
"It is in line with the Norwegian development policy on energy," he said, adding that there is also a clear focus on immediate poverty reduction in the project as it supports the extension of electricity distribution lines to more than 70,000 households in the transmission corridor.
"With several new hydropower projects coming on board in the next few years, the project is crucial in developing a robust and reliable transmission network allowing transfer of power to the main load centres for domestic needs as well as giving Nepal the ability to export at least 1,200 MW of electricity to India,” said Marasini, on the occasion.
"Access to electricity is vital for Nepal’s all round development," said ADB’s country director for Nepal Kenichi Yokoyama.
"The project – a priority initiative of SASEC – will help Nepal Electricity Authority (NEA) to substantially upgrade and expand transmission and distribution lines and substations," he said, adding that it will also help Alternative Energy Promotion Centre (AEPC) to provide electricity to rural communities with mini grid renewable energy systems.
The SASEC Power System Expansion project is expected to be completed by December 31, 2021. The renewable energy portion of the SASEC Power System Expansion project will be implemented by the AEPC and the components related to power transmission and distribution network improvement activities are to be implemented by NEA.
The grant from Norway will complement a $180 million loan from the ADB’s concessional resources of the Asian Development Fund, a loan of $120 million from the European Investment Bank, and a $11.2 million grant from the ADB-administered Strategic Climate Fund.
The project aims at increasing the mini grid-based renewable energy systems in off-grid areas and improve the management capacity of the NEA and the AEPC.
Under the power transmission and distribution capacity development component, approximately 45 km of 400 kV transmission lines and 192 km of 220 kV transmission lines along the Kali Gandaki Corridor and the Marsyangdi-Kathmandu route will be constructed.
Likewise, grid substations will be constructed, augmented and replaced in various parts of the country.
The project will strive to achieve cent per cent electrification by assisting connection to marginalised households in the new distribution corridors.
Monday, June 9, 2014
ADB hands over Nepal's First wind-solar hybrid system to government
Monday, February 10, 2014
Industrial trade fair concludes
Thursday, February 6, 2014
Development of small and cottage industries reflect investment friendly environment
Wednesday, February 5, 2014
National Industrial Exhibition on February 6-10
The 12th edition of the exhibition is aimed at promoting domestic productsand bring together entrepreneurs from across the country. The five-day event will also help to encourage entrepreneurs to focus on quality products.
