Nepal wants to support renewables up to 1 MW through viability gap funding


Nepal's Alternative Energy Promotion Centre (AEPC), controlled by the Ministry of Energy, Water Resources and Irrigation, is planning to support PV and renewable energy projects not exceeding 1 MW in size through viability gap funding (VGF) — a scheme that has often been used in the Indian solar market.

The VGF scheme is usually utilized through public-private partnerships to support large infrastructure projects by providing a capital grant at a certain stage of project construction. This kind of support is, in general, available only when projects are selected through a process of competitive bidding.

The AEPC on June 3 issued a call for concept to help developers and regional governments submit their project proposals. Applications will have to be submitted by July 4.

Selected projects will be financially backed by the recently established Sustainable Energy Challenge Fund (SECF) and funds provided by the U.K. government.

According to the latest statistics from the International Renewable Energy Agency, Nepal had installed solar power of 60 MW at the end of 2020. Around 95% of its population currently has access to electricity and its installed capacity comes mostly from around 1.1 GW of hydropower.

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