Suman Basnet on Reviewing Nepal's Rapid Rural Electrification Achievements

[00:00:05] - [Speaker 0]
Welcome to Pods by PEI, a policy discussion podcast series brought to you by Policy Entrepreneurs Inc. My name is Kushi Hang, and in today's episode, PEI colleague Shreya is in conversation with Sumon Bosnett on reviewing Nepal's rapid rural electrification achievements. Sumon is a hydropower, renewable energy, and management professional with over thirty seven years of experience in the development and private sectors. He is currently the team leader of the Nepal Renewable Energy Program, a government of Nepal program supported by The UK. His research assesses the rapid acceleration of electricity access in rural Nepal since the early two thousand, identifying key factors contributing to this phenomenon.

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It highlights the importance of effective governance, innovative policies, and different sociopolitical conditions in driving rural electrification. Based on his studies, Shriya and Suman explored the transformative journey of rural electrification in Nepal, highlighting its evolution, impact, and the forces that have shaped its progress over time. They also examine the challenges of equitable access, energy reliability and integration of diverse models. Reflecting on the broader implications, they consider how lessons from Nepal's experience can inspire sustainable development and inclusive energy transitions worldwide. Disclaimer.

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The views expressed in this podcast are Suman's personal views and do not reflect those of the organization he works for or represents. Like listening to Pods? We'd love to hear your thoughts. So please leave them on Spotify, Apple Podcasts, YouTube or wherever you listen to the show. You can also follow us on Twitter tweet2pei and on Facebook and Instagram policyentrepreneursinc for updates on the latest episodes.

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We hope you enjoy the conversation.

[00:01:54] - [Speaker 1]
Namaste, I'm Shri Arana.

[00:01:56] - [Speaker 2]
Namaste, I'm Suman Basnith.

[00:01:59] - [Speaker 1]
In today's episode, we have Suman Basnith to discuss his recent publication on rural electrification in Nepal. His work sheds light on the key factors that enabled Nepal to achieve rapid rural electricity access in the first two decades of this century. Welcome back to PODS by PEI, Suman.

[00:02:17] - [Speaker 2]
Thank you, Sriya. Good to be back.

[00:02:20] - [Speaker 1]
So, Suman, let's kick off today's conversation. Could you take us back to the early nineties and the early two thousands? What did Nepal's energy landscape look like back then, especially in rural areas, and how did the journey toward rural electrification first take shape? Could you give us, like, a brief overview of where it all began?

[00:02:40] - [Speaker 2]
Sure. Well, I think I would like to start by saying electricity in itself has been very important in the lives of people in Nepal and in in Nepal's development, and not only in Nepal, all over the world. Why? Because with electricity, you get better lighting, and lighting itself, has implications for how students, you know, young students study, safety, the convenience that it brings. In addition, it's used for information and entertainment and then people use it to use equipment for convenience.

[00:03:18] - [Speaker 2]
So electricity has been important. Now when we look at electrification, I think the experience not only in Nepal but in other countries, for example, Norway, has been that it usually starts from urban areas and then goes to rural areas. It starts with electrification of people with more income to less income. It goes from areas that are more accessible to more remote areas. So as they go further away from urban areas, from development, becomes more costly, the quality becomes less, and the management of it becomes more challenging.

[00:04:03] - [Speaker 2]
So I think in general, usually to take electricity to rural areas, there's usually a push from the government along with development partners, but there's also a pull from politicians, communities and households, you know, and it's driven by the voice that they have and the means that they have. So even though electricity came in Nepal in 1911 through FARPANK, I think all these dynamics also played out in Nepal. You know, first, it was the richer people who got it. It was more urban areas that got it. It was more accessible areas that got it.

[00:04:38] - [Speaker 2]
So if you look at electrification, first, happened in Kathmandu. And then where did it go next? Biratnagar. Where did it go next? I mean, Birgan, Chitaura, and those places.

[00:04:48] - [Speaker 2]
Now, elect rural electrification is taking electricity to the rural areas is usually seen as a loss making business. It's not a profitable business. So when that is done, it usually has social objectives and it needs grant funding. So I think these sort of dynamics have also played out in Nepal over the years.

[00:05:12] - [Speaker 1]
So you talk about a lot of challenges that were faced in the early rural electrification efforts. But despite these challenges, I think Nepal has made quite a significant progress electrification, not just rural electrification, but electrification in general. If you were to put it into perspective and just talk in terms of the overall electrification effort, currently, about 94% of the households have access to electricity, of which about 70 or 75% of the households are actually connected to the national grid. The remaining use off grid solutions. But, Suman, reflecting on this progress and especially focusing more on rural electrification, what do you think have been the key factors, that drove the success and what strategies or conditions do you think made it possible?

[00:06:00] - [Speaker 2]
Yes. Since electricity came to Nepal in 1911 and until the end of the twentieth century, we see, you know, just about a a third of the people had electricity and I think the numbers or the percentage was less, even less in the rural areas. And as I've written in my paper, we've seen a dramatic increase in electrification since the start of this century. There were a number of factors. I mean, I talked about pull and push.

[00:06:32] - [Speaker 2]
One of the things was the democratic changes that happened in the country where people had more voice. They could, you know, put their voices forward more readily, more openly. And there was elections and, you know, people had to really cater to the needs of the communities and people. And electricity has always been something that is really valued by everyone. So that is one.

[00:06:56] - [Speaker 2]
The other was there was increased access to rural areas. There were more roads. So places that previously the national grid would not go became possible it it became possible to take the national grid there. There was a sharp rise in foreign employment, which really increased the disposable income of households from which members went abroad, but it also increased their aspirations. You know, they wanted to have more comfort.

[00:07:22] - [Speaker 2]
So all these, I think, played in sort of the pull for their electrification. And the government also came up with innovative policies and institutions. Nepali Electricity Authority has always been mandated and I'm sure we'll talk a little about that later on. And there's always been a push to NEA to do grid expand the grid for electrification. But then there was the Alternative Energy Promotion Center that was established in the mid nineteen nineties.

[00:07:48] - [Speaker 2]
And it brought forward, among other things, the provision of subsidy for end users. So that was one innovative policy. The other was community rural electrification entities that were established through a bylaw that NEA brought to really promote community based electrification from the grid. There was also a significant increase in international development assistance. The Asian Development Bank has been supporting Nepal for grid, based rural electrification expansion, for for quite many decades.

[00:08:21] - [Speaker 2]
But then, there are other international development, assistance that have come both for grid and also for, off grid electrification. And then a number of a mix of models have also been tried. There was the National Utility, as I told you, that provided did a route electrification. There were private companies, like Putuwal Power Companies, where I actually began my career many years ago. But there are other companies, for example, in the Khumbu region, there's the Khumbu Bichili company in the, you know, Lukla area, there is Soledi Chalsa Electric company, and there were RESCOs or, you know, renewable energy service companies that came on and then there were company institute sorry, community institutions that were also part of this mix and then households.

[00:09:07] - [Speaker 2]
So there was, you know, there was a pull for various factors. There were some policy conditions that were brought about, and then there was a mix of models. So I think all these kind of helped to really accelerate electrification.

[00:09:20] - [Speaker 1]
So you've briefly touched upon the various models for rural electrification, and I'm sure each has its own strength and its own challenges. But drawing from your own deep understanding of the sector and your work in the sector, how do you think the choice between what kind of model is chosen is made?

[00:09:39] - [Speaker 2]
I think we have to understand that really electrification, though at first seems like a very technical challenge and task, it's it's a sociotechnical, endeavor, where also politics, really plays a very important part. So, as in any other development, in the country, I think politics really drives electrification both from a commitment perspective that there has to be a commitment and also on prioritizing where you need to do electrification. So I think that is something that we should always remember. But I think one thing that, has been realized is the national grid pathway or just extending the grid for electrification itself is not sufficient for universal energy access, you know. So, I mean, if you really go to the remote areas where the houses are very dispersed, we have to go at household level with household energy systems, like solar home systems, maybe household biogas if it's other type of energies.

[00:10:39] - [Speaker 2]
And then you come to remote areas, but where there is a concentrated group of households where mini grids would be more appropriate. And if they're there's a river close by, there could be a mini or micro hydro. Other areas, they could be solar, wind, etcetera. And then when we come to more accessible areas, they could be the national grid, you know. So I think there are two things that come here.

[00:11:02] - [Speaker 2]
Firstly, they may have to be a mix of these things, you know. It's not either or. And there could also be a graduation. You know? First, a remote house remote area.

[00:11:13] - [Speaker 2]
Households have solar home systems, but then there are more households that have come in the area, so a mini grid would be more appropriate. And then later on, a road is built so it's easier to transport the the wires and the transformers, etcetera. So the national good could come in, you know. So I think it's it has to be a mix of solutions given the circumstances both geographically, economically, financially, etcetera.

[00:11:39] - [Speaker 1]
So we don't have, an ideal mix, but it is an iterative process looking at the geography and looking at how the area is developing. So it's not a one off. This is how it should be.

[00:11:52] - [Speaker 2]
Exactly.

[00:11:53] - [Speaker 1]
Okay. So let's move on to the policy landscape. You've highlighted on your research paper that over the years, electrification policies have been shaped by both innovative ideas, and there have been periods of discontinuity as a result of political situation. Now how have shifting political priorities influenced these policy changes, and what impact has that had on rural electrification efforts? Could you maybe highlight any successful policy intervention that stood out to address these challenges?

[00:12:28] - [Speaker 2]
Rural electrification, I think, has always been a priority both for the beneficiaries and also the political leadership that depend on the beneficiaries for their political, you know, leadership, continuation of their leadership. So I think the political priorities is not so much on whether to do rule electrification or not, but it's always as I said before on where to do it, where the priorities are. I think one of the successes especially with, you know, what we call off grid rule electrification has been the renewable energy subsidies that were introduced by the Alternative Energy Promotion Center. And there has been a number of, you know, revisions on that. And the subsidy were very important because it really looked at electricity provision from a perspective of a right that electricity should not only be given to people who live in in in big cities.

[00:13:30] - [Speaker 2]
It it should also be know, available to people living in far out areas. So it tried to give an equal playing field to all the regions in in the country, taking energy as a right. So the additional cost that it is that is needed to take electricity to a far off area, we need to subsidize it so that the beneficiary does not have to be overly burdened by by that. However, you know, political economy comes into the subsidies and over the years, and I think we've had remarkable successes through the subsidy policy. But over the years, you know, you know, there is different pushes and pulls that say, okay, this technology should be prioritized or that technology should prioritize or this category should be there or that category should or the amount that should be given.

[00:14:23] - [Speaker 2]
So all these have, really brought about certain, you know, diversions in the impact of of subsidies. There have been, you know, talk about many free riders, people who really did not need the subsidy who availed of it because, you know, they were more aware of it or they had the the connections to get it, whereas the people who were actually supposed to get it did not get it. So so there was those sort of developments. But I think the subsidies did have an immense impact in really jump starting electrification in the off grid areas. Another very important initiative was the community managed rural distribution that came about through a bylaw that NDA enacted.

[00:15:04] - [Speaker 2]
What it did was it really hand gave management of rural electrification, grid based coal electrification in more peri urban or remote areas to the community. And when this initiative started, I I was involved in through my previous work in other organizations in helping these communities to start that, we saw a dramatic decrease in the losses in the system and the amount of the rate of collection of tariff. And we found that maintenance of the systems were much improved because community organizations were more responsive as opposed to, you know, the utility having to send their people from far off areas. So I think that was another very important initiative. The political economy that comes in here is, I mean, NEA, as we show, we'll talk about later on, has a dual task of being profitable, but also, you know, making sure implementing the government's mandate to give everybody electricity.

[00:16:06] - [Speaker 2]
And the NEA has traditionally not been very interested in loss making ventures as rural electrification. But when communities take up these rural electrification and make these a little profitable from their perspective, there has been a tendency that of NEA trying to get it back, you know, into their folds again. So that is there. And another thing is the the NEA has been mandated through its act to do electrification. So there's a lot of political pressure to do it.

[00:16:36] - [Speaker 2]
And also another thing that has happened is there's been a lot of donor funding that has come. And in addition, NEA has also put in its own resources for electrification. But I think these sort of are some of the policy initiatives that have really stimulated electrification development.

[00:16:54] - [Speaker 1]
So coming to institutions, two major institutions that we must talk about is, of course, the NEA and the AAPC and the institutional dynamic of the two. So on the one hand, NEA's centralized approach has its own limitations. Whereas on the other hand, we have AEPC who has a more decentralized approach, which is often donor funded. How do you think this dynamic has shaped the progress and the focus of electrification in these remote areas? And also in case in cases where the grid extends into areas with already existing off grid investments, community resources are then wasted.

[00:17:32] - [Speaker 1]
Right? And, in that case, how can you imagine a better coordination between the two institutions?

[00:17:40] - [Speaker 2]
Right. I mean, looking at them individually, the Nepal Electricity Authority, as I said, has a legal mandate to be a profitable institution. You know, it it is it is a corporation, so there's a lot of pressure on it to make profit. But at the same time, it also has the mandate to do electrification, which is a loss making proposition. So there has also always been this tension between what focus NEA should give to rural electrification.

[00:18:08] - [Speaker 2]
That is one thing. The other thing is NEA with its headquarters in Kathmandu is a very centrally managed national utility, a very top down. So I think that those are the two dynamics that we have to consider when we talk about it. The Alternative Energy Promotion Center was established to really provide electricity and other clean energy, renewable energy solutions to communities which were far away from the national grid so they didn't have to wait for many years to get it. And I think it has achieved a lot on its mandate to promote distributed renewable energy development.

[00:18:44] - [Speaker 2]
But this has come at the cost of being very dependent on donor funding. So it is heavily heavily dependent on donor funding, and sometimes I say it's unhealthily so. So that kind of sometimes restricts what it can do and how fast it can do. Now the dynamics between NEA and AAPC has it's mixed. I think there has been areas where NEA and AAPC have really cooperated and coordinated their work.

[00:19:15] - [Speaker 2]
But at other times, especially when AAPC funds system thinking that NE will not come in that area for many years. But for various reasons, which are not only technical but sometimes political, the national grid is extended to that area, and the micro hydro or mini hydro that is there is, you know, made defunct. So in that way, there's a lot of national resources that are wasted, you know, that but I think in the recent years, there has been a lot of development and cooperation between NEA and APC to really connect a lot of these feasible micro hydro and mini hydro systems to the grid. So that is something that I think needs to be done going forward too. But the other thing that we have to consider is federalism and, you know, the mandate that the constitution has given on electricity provision to all the different levels of government and I think that has to be used constructively to really address some of the issues.

[00:20:15] - [Speaker 2]
For example, one thing that has always been in the cards is the unbundling of NEA but I feel especially the distribution business should be unbundled, maybe have a distribution entity in each province, possibly with joint ownership of the federal and the provincial government and even local governments that could then target their electrification efforts to that particular province, you know. Now, the constitution has given much more responsibility to local governments in in energy provision and I think that has to be utilized. We should build up the capacity of local governments to really, you know, cater to the needs of their their constituents who they know best. And then ABC has, and it has started to do that, really convert itself into a center of excellence that instead of being trying to provide services, energy services from, you know, the capital, provide technical to local governments, provincial governments and other private sector and other entities on quality assurance, capacity building, database management, sourcing foreign assistance into the sector, including climate and carbon financing.

[00:21:33] - [Speaker 1]
So you talk about off grid solutions like micro hydro and solar mini hydro, and these have been critical for the rural electrification efforts, in Nepal. But how do you see the evolution of off grid, electrification, and what can be done to better integrate these systems with the broader electrification efforts? And maybe to this question, I'd also like to add what has been the role of development partners in this and also the private sector?

[00:21:58] - [Speaker 2]
I I now tend not to use the word, but rather distributed sustainable energy development. Because sometimes when you talk about off grid and on grid, it it creates an artificial divide between, you know, the so called haves and have nots. Because initially when this term started off grid, it was really looking at energy access aspects of energy provision that where there is no grid, then these need to be provided. But I think distributed sustainable energy development with, you know, solar rooftops, micro mini hydro, wind, etcetera, and pellet based energy generation also has relevance in energy transition, Nepal move away from traditional and fossil fuels, and also energy security in, far flung areas where the centralized grid supply is not very strong or absent, you know, distributed electricity generation could help augment the voltage, the reduce the losses, and give get better quality. So I think distributed sustainable energy development actually has equal, if not more role going forward in Nepal's sustainable energy development.

[00:23:09] - [Speaker 2]
And I think sometimes there is a debate whether centralized or decentralized are a zero sum game that we can only do one and not the other, but I think we need to have an integrated approach where the federal government takes on bigger projects, know, transmission lines, provincial government takes on, you know, the distribution lines, high voltage, you know, medium scale projects, and then local governments take the distribution at the local level with that. So I think that is sort of the the pathway that needs to be done. And the other thing that we talked about earlier is the grid connection, interconnection of distributed renewable systems should be continued and in fact prioritized. And this not only helps the local communities to really, you know, make their energy more sustainable, but also use energy for their income generation and increased livelihoods. But if done in a large scale, I think this can also help improve the Nepal's and the nation's electricity security given our topography and, you know, geography.

[00:24:11] - [Speaker 2]
Now the other part of the question you asked me about was on development partners and I think development partners have been very crucial in supporting energy development in Nepal in general, but especially distributed sustainable energy development. There are various UN agencies, there's UNDP. I worked for UNDP a long time ago in the Rural Energy Development Programme. Denmark, Norway, Netherlands, Germany, Finland, The UK, USA, European Union, the World Bank, ADB. I think some of the names that come in our minds, I'm sure there are others that I may have missed.

[00:24:48] - [Speaker 2]
There's been a lot of support for subsidy provision from development partners. This has been a blessing and a curse at times also. Blessing because this has really helped to jumpstart the sector and bring it where it is now, but not so good, in that sometimes we've I think that we've really created a dependency on on donor funding. And also, the donor support, I think you mentioned earlier, sometimes waxes and wanes based on international factors that are outside Nepal's interest or control. And sometimes we are driven by, you know, conflicts that happen in other parts of country rather than our own situation.

[00:25:30] - [Speaker 2]
So that is an issue. The other issue that development partners have had over the years is how do we really provide this the support? Do we do it parallel to the government, together with the government or through the government mechanism? And there's all these issues about, you know, accountability and the competence. So I think we've tried out different areas of of how to cooperate.

[00:25:55] - [Speaker 2]
But going forward, I think I think Nepal has to drive our own development and really seek the development partner's assistance rather than the other way around. So I think that is what I would like to talk about say about development partners. As far as the private sector is concerned, especially in the distributed sustainable energy development, they have really been very important. They've had a very important role to play, especially the private cell companies that came in initially because they took on this task even though there was a lot of risk in it. And we really have to acknowledge their contribution to the sector.

[00:26:30] - [Speaker 2]
However, given how it developed, a lot of these companies developed themselves more as a product or supply product supplier or as trader rather than an energy service, you know, provider. And their, you know, involvement depended a lot on the subsidy mechanisms. If there were subsidy available, they would get into the they do more. If there was less subsidy, they would do less. So I think there is now maybe a need to move more towards a market based approach using a viability gap funding mechanism where required and really focus on delivering energy services rather than energy products.

[00:27:11] - [Speaker 1]
So you've also highlighted in your research that some transitions like lighting, it progressed quite quickly. Factors such as reduction in kerosene subsidies, helped a lot.

[00:27:23] - [Speaker 2]
While

[00:27:23] - [Speaker 1]
others like the shift to electric cooking didn't quite take off as expected. What were the key reasons behind this, slow uptake, and do you think that these factors are still persistent? Do you see the current scenario? How do you see the current scenario for cooking both in rural and urban areas?

[00:27:42] - [Speaker 2]
I mean, cooking is is such an important part of NEC usage in Nepal. A study that was done when I first started, the work in the sectors indicated that almost 60% of the energy used in in a in a household went for cooking. So and I think cooking, especially with traditional fuels, has immense adverse health impacts with indoor pollution, with drudgery for especially for women and children who are traditionally involved with the fuel collection, the environment, and the energy security issues. So I think the need to really go into more clean cooking has always been felt. However, the factors that work against it, you know, getting more rapid acceptance as electricity was because in lot of areas, traditional fuels were more affordable than other forms of energy.

[00:28:41] - [Speaker 2]
And later on, LPG came in to the country. It was more accessible. It was more convenient. On the other hand, electricity supply was very unreliable. So I think there was more of push to using traditional fuels, and the push was more towards promoting improved cook stoves that used traditional fields more efficiently that didn't have didn't have as much of an impact on reducing the indoor air pollution as, for example, adopting electricity or, you know, biogas.

[00:29:14] - [Speaker 2]
Biogas was another area, but biogas also suffered because it was a little cumbersome to really operate it. And with households dividing up at such rapid rates, the livestocks in in in the household were divided among, you know, brothers or sisters so that there was not enough feed for these. However, now that firewood is getting scarcer and has immense negative health and environmental impacts, LPG is getting more and more costly. Electricity supply has become much more reliable. I think electric cooking will rapidly be more and more feasible.

[00:29:51] - [Speaker 2]
I think it's already feasible, but it'll be adopted more and more. And because of cost and reliability of electricity, and it's much more convenient, And I've heard households say that electric cooking is even more convenient than LPG. So I think clean cooking is is a push of the future.

[00:30:09] - [Speaker 1]
So moving on to the final segment of the podcast, let's talk about the larger theoretical framework we've applied to your research. So your research draws on the energy justice framework, which emphasizes that energy transitions are about more than just expanding and it's more than just access. It must address critical issues like equity, fairness, inclusivity. Could you explain what the energy justice framework entails and how this framework can be contextualized in Nepal's context?

[00:30:38] - [Speaker 2]
Energy justice is just a very academic way of saying that, you know, everybody should have a shot at getting fair access to clean, affordable and reliable energy in general, electricity maybe in particular, that energy production or use should not harm anyone, and that as far as possible, everyone should have a say in how energy is delivered to their particular community or household. So that what Energy Justice Worldwide kind of advocates for. So translating that to to our context here, and this is also applicable in other parts of the world, we need to consider having adequate, reliable, and affordable electricity, if you're talking about electricity, as a right rather than a commodity because electricity now is going to become so important part of not only a social but also our economic development. Now one thing that is needed and the reason why electricity access differs geographically, there is less in in the Western parts of our country as opposed to the Eastern parts and central parts, is because of the distribution network that exists there. And just because grid has reached an area does not necessarily mean that the quality of electricity or the adequacy of electricity is is sufficient.

[00:31:59] - [Speaker 2]
So, I think we need to have, a robust transmission and distribution of electricity. That's very important. And I think, there has to be a push that this happens throughout the country and not just concentrated in more accessible areas. And where grid is not possible or it's very expensive, I think many grids and household systems still have relevance. We still see that, the small percentage of households that still have not ill got electricity, a majority of those are maybe in the Kurnali and the Sudar Pashtun provinces.

[00:32:34] - [Speaker 2]
So I think there has to be an extra focus in these areas to put in more investments so that there is, you know, a better supply of electricity. The other thing that we talked about is allowing for interconnections between the grid and mini grids where possible because this not only helps the mini grids, but it also helps the national grid to have an additional supply of electricity in remote areas that helps to, you know, make the system more reliable. Institutionally, as I said before, one way to really promote energy justice, electricity justice is to unbundle NEA distribution so that regional or provincial distribution companies can best focus on the needs of that particular province, know. So really take development away from a centralized approach to a more decentralized approach. We have to work more towards building the capacity of provincial governments and local governments to manage electricity development under their sphere of constitutional mandate, you know, help to see which areas where the local government could come in to make electricity supply more dependable, of better quality, and really empower them to do that.

[00:33:46] - [Speaker 2]
Maybe there are some areas that the provincial government can do better. Work there and then the federal government is there. And I think it's also important to really empower the Alternative Energy Promotion Center to be a center of excellence, to provide adequate support both technically and and sourcing national and international funds to the provincial and the local governments.

[00:34:08] - [Speaker 1]
Okay. So I actually wanted to ask this question more centered around Karnali and Sudar Pashim because you've clearly highlighted on your research paper as well that the geographical disparities is very stark. And I wanted to add more on federalism and since you've already brought up some of these nuances. Do you want to focus more on these two regions and just trying to build a case where you bring in the element of federalism and also talk about unbundling of NEA?

[00:34:37] - [Speaker 2]
Yeah. I think federalism is quite a big issue and I think it needs many other podcasts to really discuss about federalism and its opportunities and challenges in general. I think federalism comes with the conviction that we really need to have development at a scale that is manageable and best serves the beneficiaries of that development. So for local development, it's the local governments that would be best placed to understand and execute development at the provincial level is the province and at the national level to make sure that we work as a nation in an integrated manner, the federal government is there. And for federalism to work, it's not just political, you know, power devolution that needs you know, also need human resources devolution and also financial devolution.

[00:35:29] - [Speaker 2]
And that's a debate that is happening in Nepal in a wider scale. And in the same way, I think for energy development, there has to be an understanding that maybe there are certain areas of our country for various historical and other reasons have fallen behind in energy development. So there has to be a more focus given to those areas. And really looking at what is the best mix, maybe all the areas may not be able to be served through the grid because of, you know, geographical limitations. So there should be more emphasis on mini grids and some areas where household systems have to be given.

[00:36:06] - [Speaker 2]
I think the capacity of the subnational governments to understand these issues and to really work for it both from an advocacy perspective, from resource mobilization perspective has to be increased. And as I was talking earlier, one way is to really unbundle NES distribution business so that we have more distribution companies serving different provinces, for example, that could really focus its attention to the needs and the priorities of that particular region. And when we talk about energy justice, and I I just want to switch back on that, energy justice is not just about geographical disparities. That is there for certain and we have to address that. But even within urban areas or even within area where there is there is economic disparity, there are people even in Kathmandu who are not able to afford electricity for various reasons because the connections rate are too high, because it's too expensive.

[00:37:13] - [Speaker 2]
So I think those are things also we should we need to consider and I guess that gets that's that gets aggravated in in in other areas also. You know, there are disparities even within those areas. So I I think we just have to talking very philosophically, really embrace federalism and make sure that there is a synergistic and a cooperative, you know, approach to electricity development. Now the Electricity Act that is proposed, the revised Electricity Act, deals with some of these aspects, but I think there is need there is need to more there to be more thought and debate on this. It does demarcate, you know, megawatt generation on the different levels of government, but it does not really talk about transmission and distribution more specifically.

[00:38:02] - [Speaker 2]
So and that is not clear. So that clarity is something that should be worked upon. And I think we need to have more synergistic approaches to, you know, institutional developments at the these three levels, policy development and also funding that would really help with the energy development in our federal context right now.

[00:38:22] - [Speaker 1]
So before we wrap up, let's reflect on what we've discussed so far. Nepal's electrification journey, it's been quite fascinating driven by a mix of governance, reforms, policy innovations, institutional efforts. However, we've seen that access alone does not equate to energy security or even quality. So despite widespread electrification, consumption is still low. Many experience unreliable supply and rely on backup solutions due to frequent outages.

[00:38:52] - [Speaker 1]
And as we move forward, do you think that we need to now also start talking beyond access and move the discourse towards energy security where we ensure quality, the reliability, and the sustainability of electricity services? What do you think are the key priorities in the next phase of the electrification journey?

[00:39:11] - [Speaker 2]
I I think I would like to sum up by saying that the future looks promising. I think we've come a long way in how we develop our energy and electricity in Nepal. There is the commitment now of 100% electrification. There are targets, whether they be in the SDG seven goals or the NDCs or the strategies and various roadmaps and plans we have, and there's also the precedence of action from recent past efforts. And so I think we we are going to make progress.

[00:39:44] - [Speaker 2]
But as you said, sometimes we have to just sit back and really think about what really constitutes electrification. A light bulb that is not any brighter than a candle, is that electrification in an area, or is there more to electrification? And the other thing that we all have to remember is energy is never the end. It's a means to an end. So you can't people cannot eat or, you know, spend electricity by itself.

[00:40:11] - [Speaker 2]
They have to use it for other purposes. So I think we have to look at electricity access more from a multi dimensional perspective. That is one thing that the Essie For All initiative had introduced. I don't know how much traction that has got. Talking about a multi tier framework for electricity access, which kind of acknowledges that electricity access is not a binary thing of yes and no, but it is multifaceted.

[00:40:40] - [Speaker 2]
You not only look at the adequacy of the electricity that is supplied, that does a household have adequate electricity, when is electricity available, especially during the day and especially in the evening hours, what is the quality of electricity, can people get it easily legally, and is it affordable? So there is this multifaceted aspects of access that has to be looked in. So we should kind of celebrate that almost 100% of the population have received electricity in some form. But then our next push is, as you said, on how to make it more reliable, how would people be able to use more electricity to, you know, make their life more convenient, to to protect the environment, to help reduce climate change or adapt to climate change. So I think that is something that we have to think about in future.

[00:41:35] - [Speaker 2]
And electricity, especially in rural or peri urban areas, is not only just for lighting or electronics, but also for socioeconomic development. It can be used in schools, institutions, or it could be used by enterprises. So I think this has to go hand in hand. And for electricity to really gain traction, what we've seen recently is the more adequate we make it and the more reliable we make it, I think that would induce people to use more of it and thereby increase our consumption. So, I think these are various aspects that we have to keep in mind.

[00:42:11] - [Speaker 1]
Thank you, Suman. I think that was a wonderful conversation, and hopefully, that was one step towards talking about electricity from just access to one that talks more about the quality of electricity and covers more facets as you just mentioned. Thank you for that incredible episode.

[00:42:28] - [Speaker 2]
Thank you for the opportunity and it's a great pleasure to share my thoughts and experiences. Thank you.

[00:42:37] - [Speaker 0]
Thanks for listening to Pods by PEI. I hope you enjoyed Shriya's conversation with Suman on reviewing Nepal's rapid rural electrification achievements. Today's episode was produced by Nirjan Rai with support from me, Khushi Han and Bhivuti Banta. The episode was recorded and edited at PEI studio. Our theme music is courtesy of Rohit Shakia from Zindabad.

[00:42:59] - [Speaker 0]
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[00:43:32] - [Speaker 0]
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