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Micro Hydro Making Business
Nepalese Micro-hydro power plants facilitate small/home
businesses, leading to increased standards of living

By Kiran Singh and Satish Gautam, Rural Energy Development Program , Nepal
Program for Rural Energy
The Rural Energy Development Program (REDP) was initiated by the Government of Nepal with assistance from the UNDP to enhance rural livelihoods through interventions in the energy sector.
The REDP helps the communities in the hilly districts of Nepal to plan, install, and manage rural energy systems such as micro hydro, solar home systems, biogas plants, and improved cooking stoves. REDP has been in operation since August, 1996, and has worked with 70 Village Development Committees of 15 districts.
31 micro hydro plants generating more than 500 kW electricity have been commissioned. A further 29 plants will add another 500 kW by the end of the year. Similarly, more than 400 solar home systems and biogas plants have been installed in different villages with REDP’s support. Likewise, more than 2500 households have installed improved cooking stoves.
Income-Generating Activities
Emphasis is placed on using the electricity in ways that support the REDP’s goal of enhancing rural livelihood. Such uses include domestic appliances and electricity-based micro enterprises. The communities have either installed or are in the process of installing agro-processing mills, e.g., grinders, hullers, and oil expellers, as well as sawmills, photo studios, rural bakeries, etc.
Light to Work
Better illumination from electric bulbs and tube lights also allows flexibility for longer working hours for rural people compared to kerosene lamps. Many community members have started working late hours under the electric light, which was not possible before. Some of the activities undertaken by villagers include crafting bamboo baskets, thanka-painting, and carpet-weaving in the evening. Other villagers simply have the opportunity to continue their traditional business in the evenings too.
Chicken Raising Enterprise
In almost all settlements, broiler farming has become a very popular micro enterprise with the advent of electricity. People generally raise chicken in rural Nepal for their own consumption and not as an enterprise. With electricity, they can buy fast-growing broiler chicks from the towns, raise them for several weeks, and sell them for higher profits.
Energy Service Business
One of the main reasons cited by studies on poor operation and maintenance of micro hydro schemes in Nepal is the lack of available technical expertise in the vicinity. The REDP has been supporting the private sector through soft loans and train-ing in all programme districts to estab-lish Rural Energy Service Centers. The concept is not only to develop capability at the district level to provide repair and maintenance services, but also to provide survey, feasibility, and consulting services for rural energy systems.
Reducing Working Time
Micro hydro has been able to effect a major reduction in hard household work, e.g., grinding corn, de-husking rice, and extracting oil. In an example from Western Nepal, the time spent on grinding maize and wheat for two daily meals of a family was reduced from two hours to ten minutes.
Fossil-Fuel Savings
In all settlements in which micro hydro plants have been installed, electric bulbs have replaced kerosene lamps. Better illumination and smoke-free environments are two major advantages in favor of electric lamps. In an example from Central Nepal, residents of a rural bazaar reduced their monthly kerosene consumption from an average of 8.22 liters per household to approximately 1.15 liters after the installation of micro hydro. On average, each household is saving slightly over Rs. 91 every month ($US 1.30). Besides the savings in kerosene, the community also appreciates the quality of light from electric bulbs compared to that of wick-lamps.
Essential to Mobilize
Rural energy technology broadens the scope of socio-economic uplifting of people residing in the remote and scattered settlements. This is more so in those areas that are not likely to be connected to the national grid in the foreseeable future. However, the sustainability of these technologies depends upon a holistic development approach that emphasizes increased awareness and enhanced capabilities. Residents need not only to implement and manage the rural energy systems, but also to undertake various income-generating enterprises based on local needs and potential. For this, it is essential that the community mobilize and create enabling policy as well as an institutional environment for planning, implementation, technical support services, and social guidance.
Cloth Making Micro Enterprise
Mr. Krishna Nepali of Katuje Bazaar is from an occupational caste called Damai, which is engaged in making clothes for higher-caste customers. After his village was electrified, Nepali need not rely solely on daylight to finish his orders. Both Nepali and his wife work till late in the evening and have managed to double their income. Recently, Nepali bought another sewing machine so that he and his wife could work together and finish their orders in half the time.
Micro Enterprise of Chicken Raising
Mr. Madhusudan Lamichhane and his family are squatters in Piughar, Tanahun in Western Nepal. The family does not own any land and used to work as laborers for living before Lamichhane decided to raise chickens for the local consumers in 1998. He took a loan of Rs. 450 in mid-1998 from the saving and credit program of his community organization to buy 25 chicks. He raised them for several weeks, and sold them to his villagers. Then he bought 50 chicks and then 75 chicks and so on. After a 12 kW micro hydro plant electrified the village in December, 1998, Lamichhane took a loan of Rs. 15,000 from the community to raise 100 chicks. In the ensuing eight months, Lamichane has earned Rs. 8000 in profit and does not need any more loans to run his business.
Energy Service Business
Mr. Prakash Subedi had been manufacturing components and installing biogas plants. In January 1998, he took a soft loan from the District Energy Fund created with the REDP’s support and established the Alternative and Rural Energy Service Center (ARESC) at Damauli, Tanahun in western Nepal. Subedi also participated in training organized by the REDP on the survey and installation of pico-hydro plants (< 5 kW). Since then, the ARESC has undertaken site surveys in 30 places in the Tanahun district as well as several in the neighbouring Gorkha and Lamjung districts for the installation of pico hydro. The ARESC charges Rs. 5000 ($US 70) for survey and design and Rs. 15,000 ($US 210) for installation of pico hydro.
The success of Prakash Subedi has been phenomenal. In 1999, ARESC manufactured different components for 2500 biogas plants for other installers and installed more than 400 plants on its own.
Recently, the government has pre-qualified ARESC to supply and install solar home systems. ARESC has already installed 200 such systems in western Nepal.
ARESC directly employs 24 people and uses the services of 26 others whenever necessary.
Kiran Man Singh, Satish Gautam, more information
Kiran Man Singh is an Agricultural Engineer from India (1972) and MBA from the Philippines (1980). Kiran has been working at REDP as program manager since 1996. Formerly, he worked in Nepal at USAID, at the Agricultural Development Bank, and at the Centre for Rural Technology.

Satish Gautam is MSc in Renewable Energies from Oldenburgh, Germany (1995); and BSc in Electrical Engineering, India (1990). He has been energy development advisor at REDP since 1996.

Photo texts:
- The REDP Program is exhibited in the EXPO 2000 and got 2nd prize of the Energy Globe Award 2000 in the Public Investment Category.
- Extracting mustard from seeds in Nepal. The mill runs by a micro-hydro plant. Photo by REDP.
- Micro hydro-power plant. Photo by REDP

More information:
REDP, PO Box 107, Pulchowk,
Kathmandu, Nepal.
Ph: 977-1-520048,
fax: 977-1-521547,
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ISSUE #30 (683KB) 18 pages (2000-08-11)
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