Energy sector and poverty in Nepal

Poverty in Nepal is linked to low productivity, lack of jobs, poor health and education, and weak infrastructure, all of which depend on energy access. Development of the energy sector helps in the following ways.

1. Rural electrification: electricity from the grid, micro-hydro and solar gives light for study and business and mobile access. Households with electricity have higher income and education.
2. Productive use of energy: electricity for mills, irrigation, cold storage, agro-processing, cottage industry and tourism raises rural income and creates jobs.
3. Reduces fuel collection time and health costs: biogas, improved cookstoves and electric cooking save women's and children's time and reduce smoke diseases, so people can earn or study.
4. Lower import spending: replacing imported petroleum with hydropower and electric transport keeps money in Nepal and lowers the trade deficit.
5. Export income: selling surplus electricity to India and Bangladesh brings foreign exchange, royalty and government revenue to be used for poverty programmes.
6. Industrial growth and employment: reliable and cheap electricity attracts industry and creates jobs for youth who now migrate abroad.
7. Better services: electricity in schools and health posts improves education and health care.
8. Local development: community-managed micro-hydro and biogas build local skills and entrepreneurship; the carbon credit income can be shared by the community.

Thus, energy development, especially hydropower and the alternative energy programmes of AEPC, is a key means of reducing poverty in Nepal if the benefits reach the poor and remote communities.