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Design of a blended investment platform for renewable energy projects in Nepal

Convergence awarded a proof-of-concept grant to Dolma Himalayan Energy (“DHE”) for the design and launch of a blended finance vehicle, Dolma Himalayan Energy Investment Platform (“the platform”) for investing in renewable energy and battery storage projects in Nepal.

Nepal faces significant power supply deficits during peak demand periods, particularly in the winter. Currently, Nepal relies primarily on fossil fuel-powered energy imports from India to address this deficit. This substantially contributes to carbon emissions in the region and leads to deposition of black carbon in the Himalayas, a proven catalyst for accelerating glacial melt.

The platform intends to incorporate a peak energy management system that dispatches non-intermittent power to offset this power deficit by utilizing solar-generated power from the daytime towards the evening peak load time. Such a platform can potentially reduce reliance on energy imports from India which would result in lower energy prices and reduced carbon emissions for Nepal.

DHE will manage the platform and will also be the developer for projects supported by the platform. Convergence’s grant will support DHE to structure and launch the platform with an initial solar farm and battery storage project in Nepal. The platform aims to eventually develop 400MW of renewable energy projects in Nepal.

Design question and learning potential for the market: How can a blended finance platform be developed to invest in and develop renewable energy assets in Nepal?

DHE has already conducted an initial feasibility study for the platform and identified potential investors and project sites. During the proof-of-concept, DHE will further engage with key stakeholders including investors, operational partners and regulators to implement an initial project to launch the platform. DHE will also utilize the Convergence funding to determine the appropriate blended finance structure comprising of grants, equity, and commercial debt. The initial development stage of projects will be supported by grants while the construction and operation stages will be funded by a combination of equity and debt. During this period, DHE will also work on identifying the appropriate legal structure and impact framework for the platform.

    In progress
    Year and Quarter
    Indo-Pacific Window, 2021, Cycle 5
    Design Activity
    Proof of Concept
    Region Focus
    South Asia
    Sector Focus