[{"bbox": [83, 104, 1146, 240], "category": "Text", "text": "Nepal's two overarching objectives are to finalize the federalism reform, effectively localising its national policies and strategies at provincial and local levels, and to graduate out of Least Developed Country (LDC) status by 2026 and into middle-income status by 2030. As a result of the COVID-19 pandemic, GDP growth is expected to decline to 1.5 to 2.8% in the 2021/22 budget year. Furthermore, a political crisis starting in late 2020 has ended the relative political stability in the country after the 2017 elections."}, {"bbox": [83, 249, 1146, 359], "category": "Text", "text": "Poverty and social inequality are still major challenges. Nepal's cultural, linguistic, ethnic and religious diversity goes along with strong social stratification, which is reflected in access to and control over political and economic resources by a reduced part of the population. In 2019, 39% of the population lived in poverty, and 8% in extreme poverty; with women, people with disabilities, people of lower castes, and indigenous⁵ minorities overrepresented."}, {"bbox": [83, 368, 1146, 529], "category": "Text", "text": "Nepal's social and economic development suffers from an energy deficit and inefficient use of energy, which is often to the detriment of the poorest and most marginalised sectors of the population⁶. Generation capacity (1 580MW) is well below peak demand (>1 500 MW). Transmission and distribution losses are high and power quality is low. Despite the energy deficit, the use of energy is inefficient. Macroeconomic projections show that the potential savings for electrical and thermal energy for the eight most energy intensive sectors in Nepal are around 155 000 MWh and 8 000 000 GJ respectively."}, {"bbox": [83, 539, 1146, 755], "category": "Text", "text": "Traditional energy sources represent more than 60% of the energy mix; they include fuel, wood, agricultural residues, and animal dung, and is still the most prevalent energy for cooking. Commercial sources are fossil fuels and electricity; electricity is largely generated from hydropower and imports from India, mostly from coal fired power plants. Alternative energy sources amount to only 3% of energy: micro hydro, solar, wind, and biogas. Energy is the second biggest source of greenhouse gases (GHG) in Nepal (29%),⁷ after agriculture, despite the country's potential for clean energy. Increasing energy efficiency, and transforming the share of traditional energy into energy from renewable sources are two clear pathways to mitigate GHG emissions that could also benefit the most vulnerable populations."}, {"bbox": [83, 764, 1146, 1032], "category": "Text", "text": "The government has given a high priority to the development of energy infrastructure to build the foundation for economic growth through productive sectors such as agriculture and industries, and improve the living conditions of people. Nepal's revised 2nd NDC (December 2020) introduces quantitative targets for GHG emission reductions, especially in the energy and transport sectors. It aims at expanding clean energy generation from approximately 1 400 MW to 15 000 MW, (5-10% target from renewable energy). Of this, 5 000 MW is an unconditional target to ensure that 15% of the total energy demand is supplied from clean energy sources by 2030. The 15th National Development Plan (NDP, 2019-2024) aims to achieve a ratio of 12% contribution of renewable energy in total energy consumption by 2023/24. The National Climate Change Policy (2019) which aims as well at the use of low carbon and energy efficient and green technologies in industry, transport, physical infrastructure, and tourism sectors. The government's goal is to supply all households in the country with electricity by 2023."}, {"bbox": [83, 1041, 1146, 1283], "category": "Text", "text": "The current energy policy framework underscores the central role of RE and EE to achieve NDC and SDG targets.⁸ These are also in line with the Government of Nepal and Development Partners' joint statement for Nepal's Relief, Recovery and Resilience Plan to enable a green, resilient and sustainable recovery from the COVID-19 pandemic. However, Nepal's commitment to increase renewable energy and reduce GHG emission largely depends on international support on financing, technology transfer and/or capacity building. Development partners are very present in the energy sector, from hydroelectric and transmission infrastructure loans (EIB, WB, ADB), to longstanding, ongoing support to the Ministry to prepare and implement national strategies improving access to, quality and sustainability of energy. Germany, Norway, UK and Switzerland are currently supporting the ministry and its relevant agencies."}, {"bbox": [83, 1292, 1146, 1455], "category": "Text", "text": "The existing model of high subsidies for renewable energy have limited the ownership and sustainability of the projects, and failed to provide a clear pathway for the mobilisation of domestic and international private capital in RE and EE, therefore limiting the scale of investment to public and donor-funded grants. In order to increase interest for RE and EE investment, the Ministry of Energy, with support from Germany, UK and Norway, has created the Sustainable Energy Challenge Fund to provide Viability Gap Funding to make marginally feasible projects bankable. The action will work in complementarity with the Challenge Fund and other government initiatives, by providing"}, {"bbox": [72, 1541, 1156, 1593], "category": "Footnote", "text": "⁵ Nepal is the first Asian country to ratify ILO Convention 169 on Indigenous peoples in 2007. Approximately 37% of Nepalese population self-identify as indigenous people."}, {"bbox": [72, 1591, 920, 1616], "category": "Footnote", "text": "⁶ For example, the 2020 Human Development Report underlines energy poverty in the West of Nepal."}, {"bbox": [72, 1615, 475, 1639], "category": "Footnote", "text": "⁷ 2019 USAID Nepal GHG Emissions Factsheet"}, {"bbox": [72, 1638, 672, 1663], "category": "Footnote", "text": "⁸ White Paper 2018, Ministry of Energy, Water Resources and Irrigation"}, {"bbox": [1051, 1663, 1157, 1687], "category": "Page-footer", "text": "Page 5 of 20"}]