Nepali Times
Power sharing, Nepali style


NO DIGITAL DIVIDE: Seventh grader Rina Tamang is using a computer for the first time since community electrification brought power to her school in south Lalitpur.
Going by the number of households across the country that have wires illegally hooked to power lines, stealing electricity has become a national pastime.

Nearly 60 per cent of the electricity in the Tarai is stolen, and Jhapa and Bhaktapur have even higher pilferage rates. Rather than build expensive hydropower projects, experts say, Nepal Electricity Authority (NEA) could slash daily power cuts by reducing theft of electricity. Village and towns across Nepal have shown the way by getting local communities to manage power distribution and eliminate pilferage.

Here in southern Lalitpur, an electricity cooperative has a working model that has reduced loss to 15 per cent. In Mugling, along the Prithvi Highway, system loss has come down from 35 per cent to 9 per cent, showing that community distribution works even in urban areas.

"The 17 VDCs of South Lalitpur would still be in darkness if they hadn't joined the electricity cooperative," says Dilli Ghimire, who set up the South Lalitpur Rural Electrification Cooperative, and uses half the income from power sales to extend the grid to even more remote hamlets.

"NEA overseeing community rural electrification is like the fox guarding the chicken coop. We need a new Community Electrification Act to safeguard our achievements in taking power to the people."
- Dilli Ghimire Chairman of the National Association of Community Electricity Users Nepal
Within seven years of its launch, community electrification has brought power to 116,000 households across Nepal, and 86,000 more homes will be electrified in the coming year. More importantly, because of local oversight, few dare steal electricity anymore.

The way it works is simple. Local user groups sign an agreement with NEA to buy electricity at the wholesale price of Rs 3.60 per unit and retail it at Rs 4. With the profits, they pay for installation, maintenance and expansion. All this is in stark contrast to NEA, which is so badly managed and politicised that it suffers a chronic loss, can't control rampant power theft, and in 25 years has managed to connect only 40 per cent of the population to the grid. Even where it supplies power, it can supply power for only four hours a day in winter.

Years of lobbying, first by NC minister Shailaja Acharya, and later during the royal government, led to the Community Electrification by-laws in 2003.

The National Association of Electricity Users in Nepal (NACEUN) has over 400 members and is now lobbying CA members to amend the Electricity Act to decentralise power generation and distribution and make the country more self-reliant in hydropower.

New user groups are to be formed with communities bearing 20 per cent of the total cost while government invests the remaining 80 per cent. The "20-80 Scheme" is so popular that NEA has not been able to keep up with demand for new members.

MULTIPLIER EFFECT: Mobile phone maintenance shops are one of many downstream benefits of rural electrification in Bhardeu of Lalitpur district.
Community electrification doesn't just cut pilferage, it encourages local business (see box). In Bhattedanda, villagers use electricity to power a ropeway, once run on diesel, to bring milk and vegetables to market. Poultry farms, milk refrigeration centres, furniture shops, flour mills and lift irrigation have followed the electrification of the village. TVs and cell phones have become commonplace, and some schools have computers.

So why can't the entire country's electricity distribution system be handed over to communities including municipalities? Former water resources minister, Dipak Gyawali, strongly pushed community electrification. He says there is no reason why this can't be done: "Communitising the grid is the most effective way of managing distribution and cutting loss, especially pilferage. It is the fastest way to get rid of load-shedding in this country."

NACEUN is confident community user groups can spread the grid to every part of Nepal in 10 years if given the chance. But NEA, which has a monopoly on the generation, transmission and distribution of electricity, is not too keen to lose its control over the market. "There are just too many vested interests involved," says Anup Kumar Upadhyay, Under Secretary at the Ministry of Energy. "NEA already feels threatened by the involvement of communities in the grid."

20-80 Scheme

Ayeta Singh Tamang, president of the Bhardeu Transformer Sub Committee (pictured) has no doubt his scenic village would still be in darkness had it not been for the "20-80 Scheme". Dil Bahadur Shrestha owns one of the six new furniture shops that have opened up here since the village was electrified. He used to work in Kathmandu but moved back to be close to family and friends. Next door is Bhim Bahadur Shrestha, who has 200 chickens in his poultry farm. "All this wouldn't have been possible without electricity," he says. Down the valley, lift irrigation powered by electric pumps has made off-season vegetables possible. Village health worker Chandra Shekhar Pokharel says refrigeration of vaccines is now possible in his health post. Nearly every house now has a TV and the local Baleswor Secondary School has four computers.

Still, there are some who think 20-80 is unfair. They say NEA should hook up rural areas to the grid for free, as it does in towns and cities where the formula is "0-100".

Bhim Bahadur Shrestha's poultry farm has been doing exceedingly well and now has 200 chickens

Vaccines here are now easily refrigerated.

Use of electrical tools in his furniture shop has allowed Dil Bahadur Shrestha to increase the efficiency in his works.

Victim of its own success?

As community electrification extends the grid to remote areas, it has had a negative effect on micro-hydro projects. From Ilam to Jumla, small hydropower plants have been abandoned once the national grid has reached the villages. Despite power cuts, people prefer the grid because of the low power and unreliability of micro-hydro.

NACEUN's Dilli Ghimire says the way to save micro-hydro is to find a way to feed their surplus power into the national grid. Off-grid power has less technical losses and combined with community electrification, can help redress the country's power shortage.

Former water resources minister Dipak Gyawali says combining community electricity disribution with private sector investment in small and medium scale hydro generation is the way to go. "There are already 22 entrepreneurs in the country who are quite capable of collectively putting together up to 100 megawatts within two years," says Gyawali. "We now need to set up a hydropower generation fund with a 5 per cent tax on petroleum."

Transforming power
Electric transformation, DAMBAR K SHRESTHA
Biogas moves up, FOO CHEE CHANG
Where the wind blows, SMRITI MALLAPATY

1. R RAI
Thank you very much Ms Mahato for yet another positive report.such reports will keep our spirits alive.

2. Jib Dewan
What a contrast reading the negative news about the politicians and this story of communities cooperating to bring electricity and hope to the villages. Thanks to Nepali Times and Rubeena Mahato for restoring our faith in the future of Nepal and Nepalis. Keep these stories coming!

3. Hana
What a marvellous heart-warming story.

4. Pushpa Oli
Rubeena Mahato has done a great job, more so because it is not always that people in Europe or India have a high opinion of what Nepalis do. But Nepal's community electricity story has been an exception as these links show.
Yadoo and Cruickshank Cambridge paper:
Down to Earth Link:  and

Incidentally, India's premier environmental magazine Down To Earth about ten years ago had a similar story about Nepal's community forestry and how, in this area, Nepal was way ahead of India's forest management.

(11 JAN 2013 - 17 JAN 2013)