Feasibility Study of Innovative Finance for Renewable Energy Solutions in Nepal under REAP Intervention(WORKSHOP)

blog client


SNV Nepal

blog project period

Project Period

November 2013 to February 2014

blog project area

Project Area

Dadeldhura, Dailekh, Nuwakot

practice area

Practice Area

service area

Service Area

cross cutting

Cross Cutting Issues

Environment and Conservation

Use of biomass, especially fuelwood, has been identified as one of the key drivers of deforestation and forest degradation in Nepal.
To address this issue, SNV Nepal has established a new programme entitled “REDD+ Energy and Agriculture Programme (REAP)” which focuses on sustainable agriculture and use of renewable energy technologies solutions.
Hence, promotion of renewable energy, especially biomass based energy is one of the activities supported under REAP. However, to promote REAP interventions and reduce the dependency on the traditional funding sources, the need for additional but innovative, sustainable and market-based funding sources has been felt.

Objective and Key activities

The objectives of this study were to explore various globally used innovative financing instruments including results based financing (RBF) for promotion of RETs in Nepal; assess the renewable energy finance sector in Nepal; explore best appropriate innovative financing mechanisms/instruments applicable under REAP; assess the readiness and practicality of such mechanisms with reference to local institutional set up, private sector engagement and interest, development partners priorities and users preferences and needs and; assess feasibility of the conceptual frameworks and models for innovative financing already developed by SNV.

Services provided by SW Nepal

Under this assignment, SW Nepal carried out detailed literature review on existing global and national innovative financing modalities. Likewise, the study team also consulted with a range of central level stakeholders and undertook sample based field visits in Nuwakot, Dailekh and Dadeldhura to assess the feasibility of various innovative financing instruments and users’ readiness on such instruments. Based on the secondary review findings, consultations and field surveys, the study proposed feasible innovative financing instruments and possible institutional set-up for their implementation. The study findings and assessments were carried out in the context of 3 selected RETs- ICS, solar PicoPV and community electrification.
From 15 to 31 December 2013, SW Nepal conducted a workshop highlighting the findings and briefing the team about the assessments.