The extension of the national grid is, technically and financially, very challenging in Nepal where
off-grid renewable energy seems to be the only viable solution. Over the last 30 years, Nepal has
installed over 2,500 off-grid micro hydro plants benefitting over 300,000 rural households. The
electricity produced is primarily used for lighting purposes and powering some low capacity
equipment. Most such systems have issues of financial sustainability due to heavy underutilization
of available power. In this context, the concept of REZ has been developed with
valuable experiences from similar activities in rural India. REZ is an entrepreneurship model which
pivots around an assured power supply and creating rural enterprises. Around these, economic
activities are encouraged based on traditional skills and value addition. REZ is owned and
managed by private promoters under the public private partnership model. REZs overcome the
twin barriers of promoting renewable energy and demonstrating sustainable growth.