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Case for establishment of en Energy Conservation Fund for Nepalese industry sector

The opportunity for energy saving in Nepalese Industry is considerable. However, the actual savings remain far below the potential due to a number of barriers, finance being a major one. Case for establishment of a dedicated Energy Conservation Fund exists. Such a fund could foster the industrial energy efficiency (EE) market transformation, through measures like:

  • Awareness raising and Institutional capacity building among key stakeholders like Ministry of Energy, Ministry of Industry, sectoral associations, service providers, financial sector stakeholder, and consulting fraternity, to design, administer, monitor, and follow up potential energy conservation schemes, addressing sector level, unit level and cluster level action agenda.
  • Helping to create and manage a comprehensive and dependable baseline energy consumption data; through surveys, studies, so that benchmarks are set for specific energy consumption (SEC) in various sectors, and interventions identified for improving energy efficiency in different sectors.
  • Alleviating the power shortage related impacts on economy through incentive schemes for cogeneration and other such relevant measures.
  • Facilitating industry adoption of International standards like ISO 50001, Good Manufacturing Practices, ISO 14000, Voluntary carbon standards on emission reduction, through capacity building and incentive schemes.
  • Facilitating expansion of Energy Efficiency markets by schemes for energy auditor and energy manager capacity building, sector specific award schemes, best practice documentation/dissemination.
  • Building capacity of local financial institutions to increase their knowledge, interest, and capability for financing EE projects and leverage commercial funds to create a sustainable market for project financing.
  • Facilitating development of technical specifications, Minimum energy performance standards, typical financing agreements, performance contracts that can be useful to industry sector.
  • Incentivizing the financing of lighthouse type game-changing EC projects in association with development partners and international organizations like UNIDO, UNDP and UNEP.
  • Facilitating financing projects through energy service delivery organizations.
    Fund size and administration procedures are key factors in meeting the scope and objectives among the above wish list. Going by successful instances of energy conservation funds established in Asian region, Europe as well as USA, a similar initiative could auger well in Nepalese context because of the given energy shortfall situation and industry sector energy needs as a growth engine for Nepalese economy.

D. Pawan Kumar, Team Leader, GIZ/Integration @EEC/FNCCI