LocationsPowering lives and businesses in rural Nepal
“It’s not just about electricity.”
October 27, 2025
Micro-hydropower plants are filling the gaps in Nepal's national grid, bringing new life to communities and stimulating businesses, healthcare and education.
Photo: UNDP Nepal
Access to energy is fundamental to fulfilling basic needs, driving economic growth and advancing human development. In Nepal’s remote Himalayan villages, beyond the reach of the national grid, UNDP’s investment in micro-hydropower has changed lives, particularly for the most vulnerable.
As a widow, Pabitra Giri’s life was once a relentless cycle of farm work from dawn to dusk. Her evenings were spent cooking by the dim light of a kerosene lamp, while her children struggled to study in the flickering light. And then, everything changed.
In October 2007 a micro-hydropower plant in Kharbang, Baglung brought electricity to her village, transforming daily life.
“With electricity, my children could study after dark, modern conveniences became part of my household, and I, along with members of a local women’s cooperative, initiated a small soap-making business, securing a stable income to support our family's future," Pabitra says.
Pabitra has introduced modern conveniences into her home and with friends has begun a small soap-making business, generating extra income.
Photo: UNDP Nepal
Empowering remote communities
Extending the national power grid to remote and scattered settlement in Nepal’s rugged terrain is challenging and costly. By the mid-1990s, only 15 percent of Nepalese people had grid electricity, with a few villages along trekking routes powered by micro-hydropower plants (MHPs). The Nepalese government and UNDP identified community-owned MHPs as a viable alternative as they were cheaper and faster to build than large hydro electricity plants. As part of the Rural Energy Development Programme (REDP), UNDP invested core resources in building small-scale, community-led hydro electric plants, generating anywhere from just a few kilowatts (kWs) up to 100kW, depending on the size of the village and how much water is available.
Building on the success of REDP, which prioritized electricity access through community managed micro-hydro plants, the government and UNDP launched the Renewable Energy for Rural Livelihoods (RERL) programme to maximize electricity use for economic growth. With US$13.2 million from UNDP and $21.5 million from the World Bank, over 400 MHPs were installed between 1998 and 2014 through the Alternative Energy Promotion Centre (AEPC), Nepal’s lead agency for renewable energy. This brought electricity to more than 100,000 households, benefitting more than half a million people and enabling more than 1,000 energy-based enterprises in off-grid areas.
The project is about more than just power. It promoted community mobilization, women’s empowerment, and social inclusion, ensuring that disadvantaged groups benefitted from newly-available resources. Its transparent, participatory approach was so effective that it became a model for other organizations in Nepal and beyond.
"When villagers see an electric bulb light up for the first time, their smiles stretch from ear to ear. It’s not just about electricity—it’s about dignity and opportunity."- Kiran Man Singh, REDP National Programme Manager
More than just electricity
Micro-hydropower has transformed lives beyond simply lighting homes. In Kharbang alone, the 75 kW Girindi Khola mini grids power over 50 small businesses, including Pabitra’s soap factory. Welding and mobile repair shops, an ice cream parlour, and even a cybercafé can now operate at their full capacity. A health clinic, once only able to treat patients during daylight hours is now open in the evenings. Vaccines can be refrigerated and an X-ray machine has vastly improved healthcare. The local school has introduced computer classes and young entrepreneurs have launched a community FM radio station.
UNDP’s strategic, long-term support to AEPC has strengthened technical expertise and driven innovation. To make micro-hydro plants more affordable, UNDP increased grant support, covering 50 percent of non-local costs in addition to the government’s 50 percent subsidy on electrical equipment, which has eased the financial burden on rural communities. This success influenced national policy, leading to expanded subsidies for energy-based enterprises, which further boosted rural productivity and income diversification.
In Kharbang village alone, micro-hydro power lights over over 50 small businesses, a public school, a health clinic and a community FM radio station.
Photo: UNDP Nepal
"This was a remarkable achievement. Villages gained electricity decades before being connected to the national grid."- Govind Raj Pokharel, former Executive Director of AEPC
A model for community-driven development
UNDP also supported the government to promote a decentralized renewable energy system, which was institutionalized by the 2006 Rural Energy Policy in District Development Committees, a locally elected body, across all districts, ensuring strengthened local governance and decentralized development aligned with the Local Self-Governance Act.
In September 2025, UNDP and AEPC along with the Ministry of Energy, Water Resources and Irrigation signed a US$0.99 million agreement to scale up renewable energy and technology. Funded by the Asian Development Bank, this will provide technical assistance under the off-grid component of the South Asia Sub-regional Economic Cooperation Power Extension Project.
For Pabitra and thousands of others, each flicker of a lightbulb represents renewed hope and opportunity—proof that community-driven solutions can transform even the most remote corners of Nepal.
Nepal's micro-hydro project has benefitted more than half a million people and enabled over 1,000 energy-based enterprises in rural areas.
Photo: UNDP Nepal
“We cannot take credit for introducing micro hydro to Nepal, it existed since the early 1960s. But UNDP’s contribution is that we put communities at the centre, and by giving them ownership over procurement, construction, and management, we ensured sustainability.”- Kyoko Yokosuka, UNDP Nepal Resident Representative
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