Sustainability of Off-Grid Community Energy Projects

Sustainability of Off-Grid Community Energy Projects: A Case Study of the Management of Micro-Hydro Projects in Nepal

ABSTRACT: The crucial role of reliable and affordable energy services for economic growth and wellbeing of rural people has been widely acknowledged. Off-grid renewable energy technologies (RETs) can have dramatic benefits for rural families and communities. However, experience with such services developed to date suggests that their sustainability is questionable. A qualitative study was conducted in Nepal to analyse such off-grid micro-hydro projects and reviewed various managerial aspects of their operation. This paper highlights some important project attributes such as involvement of local people, project size, tariff structure, growths in consumption and sales revenue, post-installation support, characteristics of management team and a financial system. The research focus is on how these input and process variables drive the sustainability of such schemes.

Keywords: project development, off-grid energy service, project management, sustainability.

Introduction

The critical role of affordable and reliable electricity as a driver of economic development and well-being of people is widely recognised (Müller, Thompson, & Gadgil, 2018). A new theory of economic growth explicitly recognises energy, as one of the three factors: capital, labour and useful work (product of energy and efficiency), in a production function (Ayres, Turton, & Casten, 2007; Warr & Ayres, 2010). An  increase of 1% in per capita electricity consumption is associated with a 0.22% increase in human development index (HDI) (Ouedraogo, 2013). Yet 1.16 billion people (16% of the world population), mostly from Asia and Africa, live without any electricity services (WEO, 2016). Of these, 660 million remain out of reach of central electricity grids (van Ruijven, Schers, & van Vuuren, 2012; World Bank & International Energy Agency, 2015). New off-grid alternatives, the Renewable Energy (RE)-based off-grid services, offer them a more realistic option. Furthermore, declining costs of the technology make this option attractive.

Despite the fact that RE-based, off-grid services have brought positive results and success in reaching the neediest people, the present functionality of such off-grid systems in Nepal and other parts of the world is a major concern. Many of these off-grid systems have been found to be unsustainable in terms of performance, service delivery and/or revenue generation (Bhattacharyya & Palit, 2016; Dornan, 2014). Often these programs are focused on short-term physical targets and outputs rather than long-term sustainability, particularly overlooking after sales service. As a result, after some years of operation, such off-grid services often fail to supply electricity reliably and thus limit power access and local economic activities (Aguirre & Ibikunle, 2014; Dornan, 2014).

Management issues of RE-based off-grid services have received limited attention in the literature. In the context of ex-ante evaluation and selection of off-grid RE systems, various sustainability indicators and criteria have been employed (Mainali, Pachauri, Rao, & Silveira, 2014; Maxim, 2014). In contrast, the ex-post assessment of operational off-grid RE systems has received less attention. The ex-post sustainability assessment of such services is limited to situation analysis, comparative studies, case studies and few action research studies (Chmiel & Bhattacharyya, 2015; Engelken, Römer, Drescher, Welpe, & Picot, 2016). Most of these assessments were focused at a local context level with specific project objectives and requirements rather than addressing the broader sustainability issues of off-grid energy services.

It is important to learn how particular project attributes or, more likely, a combination of these attributes fit together and why bundles of local management practices lead to sustainability. Understanding the factors that affect the sustainable operation of RE-systems is the expected contribution of our research paper. Thus, the key research question probes: “Is it possible to discover using qualitative methods the critical combination of factors that lead to sustainable operation of micro-hydro projects (MHPs) in Nepal? The remainder of the paper sets out to identify the criteria for such sustainable operation of Nepal’s MHPs. Section two describes the methodology. The theoretical concept is presented in section three. Section four highlights key findings. A short conclusion is presented in section five.

METHODOLOGY

Justification: The research employs both qualitative and quantitative methods. The qualitative study is reported here, and was employed in the first phase to identify key project attributes of Nepal’s micro-hydro projects[1] (MHPs). This research study was reviewed and approved by the human research ethics committee of Charles Sturt University, Australia. 

Attributes of a typical community-based micro-hydro project are a hybrid of human, social, institutional and technical elements. Further, many of these variables of interests are difficult to measure and cannot easily be described with numerical analysis. Therefore, qualitative methods were employed to obtain the required detailed information. It was expected that the research design would help both to capture the first-hand experience of local people, and identify a full list of relevant project attributes. The semi-structured interviews and focus group discussions were designed to ensure that findings were obtained in as structured a manner as possible. The classic problem of ‘going native,’ or the researcher not being able to distance himself from the group to observe and analyse objectively (Le Compte, Preissle & Tesch, 1993), was overcome by withdrawing from working in Nepal work full time on his thesis (2015-2017). This enabled the researcher to stand back and be a detached researcher.

Setting:This qualitative study was conducted on the management of Nepal’s off-grid micro-hydro projects. The country has more than 50-years’ experience with this technology where the power from small streams is harnessed and the electricity generated is supplied to local villagers. More than 1,000 such micro-hydro projects with a total capacity of over 30,000 kW have been constructed across the country and about 360,000 families are connected to such electricity services (Ghimire & Kim, 2018).

Samples:Through purposive convenience sampling, altogether 12 micro-hydro projects were selected for the study. Across the 12 studied projects, the average capacity was 58 kW with a range from 22 kW to 115 kW. Except for one, the projects were owned and managed by local communities. Among these, eight were developed under the Nepal government’s subsidy program, three were supported by the Annapurna Conservation Area Program (ACAP) and one was directly funded by a child health project. These projects had a wide range of experiences with a length of operation from 3 to 25 years.

Data collection:Primary data were obtained through 12 Focus Group Discussions (FGD), in-depth interviews and project site observations. A semi-structured FGD and interview format enabled us to ask participants a set of standard inquiries. Each question set was composed of ten open-ended main questions. To facilitate the conversation, probes and supplementary questions were developed for each main question.  The question sets were made available to all the participants at least one day before the meeting (see Appendix 1). In total 72 people, including community leaders, micro-hydro managers, plant operators and electricity users participated. The number of participants in individual FGDs ranged from three to nine. Among the participants, 21 were females. Four in-depth interviews were also conducted with the chairpersons of the micro-hydro schemes who could not participate in the FDGs. The lead investigator was the sole facilitator and interviewer. In addition, he visited all 12 project locations and interacted with technical staff, local business owners and villagers to obtain additional information including: level of consumers’ satisfaction, quality of electricity service, responsiveness of the management team to power supply interruptions, transparency in financial management, and physical condition of the powerhouse and distribution network. For this purpose, a separate checklist was used. This additional information was also audio recorded and transcribed, and considered during the analysis phase. 

Data analysis: The FGD and interview sessions lasted from 52 to 75 minutes and the average length was 65 minutes. All the FGDs and interviews were audio recorded with the consent of the participants. These recordings, which were originally in the Nepali language, were transcribed first and then translated into English. The information obtained from the field study was analysed by open coding, primary coding, axial coding and selective coding. The coding process was done separately for each project. Next, thematic analysis was employed in identifying the themes. The analysis involved five basic steps (Braun & Clarke, 2006):  (i) transcribing audio recordings of all the FGD/interview sessions and becoming familiar with the data, (ii) initial coding of interesting features across the entire data set,  (iii) collating codes into potential themes and gathering information on each relevant theme, (iv) checking, modifying and improving the initial themes and checking whether the themes work in the context of the entire micro-hydro data set, and (v) generating clear definitions and names for each theme. After the eighth project was analysed, there were few additional attributes identified and there were no additions in the last two (of 12) transcripts. This evidence clearly demonstrated that the data had achieved its saturation, and hence we were confident that the key attributes of such micro-hydro projects had been captured.

THEORETICAL PERSPECTIVE

Off-grid energy projects can neither export to other load centres nor store the excess energy. The power generated by such a project has to match the local electricity demand (Müller et al., 2018). Every off-grid energy service is an independent entity and local villagers and small enterprises within the project vicinity are the load centres of such distributed generators. While a reliable and affordable electricity service is a pre-requisite for a virtuous circle within the economic system, there are many endogenous and exogenous variables that influence the economic system that drive the overall sustainability of such off-grid energy services (see Figure 1).  Moreover, in the absence of, or weak performance of any components, the economic system of the entity may not be able to sustain a virtuous circle, thus the project becomes unsustainable.

*****Insert figure 1 about here******

As shown in Figure 1, the inner circle of the diagram represents an economic system of a typical off-grid renewable energy service being implemented in the developing countries. This figure, and particularly the links between its components, represents the theoretical lens of the study. Sustainability of the system described in Figure 1 is hypothesised to depend on a number of critical aspects and their interactions, including project management, business development, growth of the local market, and socio-economic development. A generator that performs well ensures high quality and reliable electricity that both encourages households to own and use more electrical appliances and establish more small and medium enterprises (SMEs). Higher consumption of electricity directly contributes towards the well-being of people, and higher electricity output (productive uses of electricity) supports additional income and creates more job opportunities. The improved economic status of a local village will eventually help to increase electricity demand thus improving the plant factor of the generator. With a higher plant factor, the plant will be operating more efficiently and be able to secure more revenue, which can be utilised for better operation and maintenance services.

FINDINGS

There are eight overarching themes in the 37 attributes identified: MHP planning and development, investment costs and funding, use of electricity, billing systems, growth, project management, operation and maintenance, and financial management (see Appendix 2). Performance of the MHPs visited was also evaluated on four indicators: (i) growth in domestic power demand, (ii) growth in revenue, (iii) profit and a maintenance fund, and (iv) plant factor. Further, a relationship between these performance indicators and project attributes was also assessed.  Without ranking them, the rest of this section summarises the set of attributes that were observed to influence performance of the off-grid schemes and highlights some important output variables.

Involvement of Local Communities

It was revealed from the study that some communities actively participated in all aspects of planning from developing the concept to conducting the detailed feasibility study and fund mobilisation, while villagers in other projects were totally unaware about these activities. Instead, representatives of local NGOs and donor-funded projects carried out the initial tasks without engaging any local people.  It was clear that the first type were more successful.

Optimisation of Project Size

The study revealed that the selection of the project capacity (kW) in the village was influenced by both the technical parameters and preferences of the local community. Across the 12 projects, the average number of customers served by one kW was seven households, with a range from 2 to 16 households per kW. In the subsidy-supported projects, this number was found to be guided[2] by the subsidy policy. Some other projects could not generate the required capacity due to the limited amount of water in the stream or low head. One of the respondents, in his response explained:

“the available head and dry-season water flow in the stream did not allow us to produce more than 26 kW. But we could not say “no” to anyone in this village. Therefore, we, 365 families, made an agreement to construct the project and use it only for lighting and charging mobile phones”.

Unlike this, some other communities such as at Bhujung Khola, Ghandruk and Girandi Khola MHP preferred a medium-size project at the beginning. Once the electricity market was developed in these villages, they have installed additional plants to meet the growing power demand. This seemed to be about the best level for the sites visited.

Significant growth in the SMEs, domestic consumption and electricity sales revenue were evident in those projects where the project size was optimally selected prior to construction. It was learnt from the study that villagers in the small-size projects (HH/kW) were generally established to support lighting and charging mobile phones. However, this not only limits the domestic power growth, it might eventually attract the users to shift to being customers of a larger neighbouring project. During the FGDs at Sadh Khola and Togo Khola, where the electricity was used only for lighting and charging mobile phones, participants were found to be desperate for the national grid.  Over-sizing projects, on the other hand, cannot guarantee sufficient sales revenue at the beginning and that could lead toward a financial crisis. During this study, there were two such projects (Baddighat Khola and Chotte Khola MHP) that could hardly sell 50% of their total capacity, and had large loans overhanging them.

Funding Arrangements

 The owners of the micro-hydro projects are primarily responsible for obtaining the funds and managing the total investment requirements. These funds were mobilised through four different sources namely (i) government subsidies, (ii) grants from donors, NGOs and local institutions, (iii) credit and (iv) users’ contribution. Experience from the projects visited suggested that subsidies and grants typically cover 70% or more of the total project costs. Local users are largely responsible for paying the remaining costs. More than 50% of the projects used credit and the proportion of the project cost covered ranged from 5% to 25%. The funding arrangements that were associated with highest performance were those that avoided long-term, continuing debt servicing.

Electricity Tariff Systems

The electricity tariff rate and billing system were found to be fixed by the local communities for each micro-hydro project. Three different billing systems were practised in the visited projects: (i) a fixed and equal tariff for all the villagers, (ii) stepped tariffs for various amounts of power purchased and (iii) electricity tariff rates based on the consumer’s actual consumption of energy. One of the respondents, in support of the fixed and equal tariff system, voiced the opinion:

“we – all the villagers equally contributed to the project so we all deserve equal access. Our tariff is enough for the operator’s salary. For any repair works, we collect from the users.   By doing this, we saved our money. Otherwise, we would have to buy energy meters and pay for a meter reader.”

In contrast to this, another manager explained:

“different people live in our village with different interest and purchasing capacity. Therefore, we offer four different tariff rates for our users. In our village, the very-poor families can also use two lighting bulbs and pay only NRs 75 per month (less than AUD 1). The remaining three schemes are for others. Our customers enjoy the electricity and our revenue is ever growing.”

Hence, projects that have introduced a smart tariff structure in a way that ensures automatic growth in sales revenue as the consumption of electricity increased have produced more sustainable outcomes. For instance, the Daram Khola MHP introduced five different tariff rates for domestic customers. Without any increments in the rates, this project is now earning NRs 2.1 million annually, up from NRs 1.1 million in 2010.

Ownership and Daily Management 

Nepalese micro-hydro projects are owned/managed through three different institutional set-ups, namely: (i) registered community organisations; (ii) cooperatives and (iii) private companies. In our sample, the projects are community-based and are managed by a local users’ committee. The government subsidy policy does not favour private developers.

Experience from these projects showed that these executive committee members are diverse and each holds a unique characteristics from the following set: (i) level of technical know-how; (ii) dedication and accountability; (iii) ability to establish clear job descriptions, team spirit and coordination; (iv) interest in client relationship and responsiveness; (v) understanding the need for proper documentation and infrastructure; and (vi) experience and interest in institutional development. In some projects, they clearly defined the job responsibility of each team member and technical staff and worked in a coordinated manner.  One of the plant operators during the FGD stated that:

“our management committee members do not interfere in the day-to-day operation of the plant. We clearly understand our job descriptions and we always follow them. We never crossed our line and engaged in management issues. This is how we work on our project.”

Similarly, in another FGD, one of the participants, who also runs a hotel in the village, argued:

“our community has developed a management system for our project and we all honestly follow it. Our staff probably don’t get a competitive salary, but they are happy and highly motivated. We all feel that this is our project. This is why we have been successful in running our project for more than 25 years.”

Similarly, one manager proudly shared his experience by saying:

“we never wait for the next morning, when it comes to restoring the power supply in the village. Many times, we have had to wake-up at midnight, walk across the canal alignment and fix the problems. An uninterrupted power supply was and will be our top priority.”

The number of technical staff and the team composition differ from one project to another. The evidence demonstrated that the recruitment of staff is primarily driven by the amount of sales revenue rather than the number of users to be served or the plant capacity. Overall, the operational management was good, but there were some exceptions where the management team had not held a single meeting during the previous seven months. The evidence suggested that performance of many micro-hydro projects in the study was associated with management practices, characteristics of the committee members, and experience and motivation of technical staff.

Post-installation Support

Post-installation support for Nepal’s micro-hydro projects appears inadequate and inconsistent. The post-installation support in the subsidy-supported projects is limited to some capacity building activities like operator training and grant support for establishing end-uses. In some projects, local NGOs, like the Annapurna Conservation Area Project-ACAP, continue their support even after project completion.  There were other projects that did not receive any kind of support after their commissioning. A stock of essential spare parts appears necessary to ensure a more reliable power supply in the micro-hydro projects. Experienced operators who have essential spare parts in stock can repair minor problems and restore the power supply almost immediately, compared to less experienced operators who usually do not carry any spare parts.

Growth

The electricity from these micro-hydro project is primarily consumed by domestic users. Besides lighting, which is a common use in all projects, electrical power is also used for operating other household appliances such as TVs, mobile chargers and rice cookers. Further, the power demand of individual users in all the micro-hydro projects was reported to increase slowly over time, though the magnitude of change was influenced by many factors. Also since their commissioning, most projects have increased their customer numbers.

The number and type of SMEs vary substantially across the micro-hydro communities. These local SMEs can be grouped into two broad categories: (i) common enterprises like agro-processing mills, sawmills, poultry farms, and bakeries; and (ii) specialised business like hotels/restaurants and tea factories. The growth of SMEs as a result of the micro-hydro projects was found to be influenced by many factors, but an adequate supply of electricity is an important one. Partly related to a lack of SMEs, the plant factor[3]of a majority of the micro-hydro projects was found to be low. There were a few high performing projects with a plant factor of up to 50%, but most were found to be utilising less than 30% of the available energy.

Electricity Sales Revenue and Financial Management

The monthly income, expenses and savings of micro-hydro projects vary significantly. Among the 12 projects studied, the monthly collection varied from NRs 12,700 in Sadh Khola (22 kW) to NRs. 290,000 in Parppakar (100 kW).  In some projects, the monthly revenue was just enough to cover the project salaries, whereas other projects were able to save significant parts of their income. It was also found that some projects used a significant part of their savings for unexpected maintenance work.  

Various financial management practices are evident across the different micro-hydro projects. Some projects regularly maintain financial systems and have recruited staff to carry out this task. In many projects, the project managers were found responsible for billing, collecting revenues and preparing monthly financial statements. These financial reports were then checked and approved by the regular meetings of the management committees. It was also revealed that, in a few projects, such financial disciplines were not adequately maintained. A regular financial audit was another important milestone for the proper and transparent financial management of micro-hydro projects. Most of the projects conducted such financial audits on an annual basis and committees disseminated the resultant audit reports to the local communities. In addition to this, some communities also organised public audits in the villages. Despite collecting this data, it was difficult to reach a definite conclusion on the influence of financial management on sustainability.

Productive Uses of Electricity

Besides lighting, the micro-hydroelectricity enables local villagers to use Wi-Fi and computers. Local schools are able to teach computer-based and other new subjects, some local clinics have been able to install an x-ray machine and local people can buy fresh bakery items in the village. Furniture and metal fabrication shops are now available in the village. Local people own poultry farming and fresh meat houses. The SMEs in the villages create employment opportunities and offer a wide range of services and facilities. Most importantly, such SMEs contribute substantially to generating additional revenue for the micro-hydro projects.

While a reliable and high-quality electricity service is a pre-requisite for the SMEs, there are many exogenous variables that eventually affect the overall growth of SMEs in the project areas. It was reported that road accessibility helped significantly in SME growth by expanding markets for their services and products. Post-installation support such as grants for the establishment of enterprises, transfer of technology and local capacity development, were also found to be critically important input variables for sustainable operation of the micro-hydro plants. In Ghandruk village, the electricity added value to the existing tourism business. After the micro-hydro project was constructed in the village, all hotels and restaurants immediately switched to electricity. With better lighting, Wi-Fi and mobile charging facilities, many trekkers preferred to stay a night at that village. This encouraged the villagers to open more hotels and cater to more tourists. To become competitive, local hotels improved their services which eventually increased the local power demand. A similar experience was seen in another village, Bhujung, where the funding agency –Tokoshima Friendship Association, Japan – has been continuously supporting the local community in promoting enterprises. As a result, the rural community has a variety of local businesses including, bakeries, tea factories, and rope-ways. To meet the local power demand, both of these villages have installed a second micro-hydro project. Overall, the development of SMEs was critical to sustainability of the micro-hydro schemes.

CONCLUSIONS

It is possible to provide a partial answer to the key research question: is it possible to discover using qualitative methods the critical combination of factors that lead to sustainable operation of micro-hydro projects (MHPs) in Nepal? The qualitative analysis performed does reveal important attributes that affect performance of Nepal’s MHPs: (i) project management (ii) finance/economic considerations, (iii) technical aspects and (iv) contextual factors.

A given set of attributes and a bundle of management practices are important to sustainable operation of such energy services.  The domestic load has increased slowly over time, under the influence of many factors. The growth of SMEs in such communities is critical and driven by external parameters such as road, post-installation support and readily available market. A flexible and smarter tariff structure can automatically translate the growth in local electricity consumption into increased sales revenue, and thereby promote sustainability. A dedicated and enthusiastic management team with coordination capacity is critically important for sustainable operation of a micro-hydro project. Similarly, a transparent financial system and its effective implementation is a pre-requisite for efficient daily operation of the plants. Further, level of experience and motivation of technical staff, a stock of essential spare parts and good accommodation facilities for the plant operators influence the daily operation. A contingency maintenance fund is required in these communities to pay for any unexpected and expensive repair works.

We must acknowledge various limitations of the methods employed here. Although the thematic analysis is relatively simple and straight forward, and while key themes have been revealed, there are instances where precision is lacking. For example, a list of attributes affecting performance was obtained, but little could be said about the relative importance of these. We anticipate that this problem can be overcome in the second, quantitative component of the study.

In terms of further research, it is possible to do some higher-level qualitative analysis that examines combinations of the management factors that we considered. Sustainability might be a result of some critical combination, and interaction between factors might be important. Also, the idea of sustainability itself may differ between micro-hydro projects so that for small-scale projects, for example, a given set of factors is important to sustainability, while for larger-scale projects it is some other combination of factors. (Or instead, what is important may differ by location or some other characteristic rather than size.) Our own research will now move on to examine these and other issue more closely as a quantitative study is established based on surveying managers at 173 micro-hydro sites, and using econometric methods.

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Figure 1: Theoretical Framework for Sustainability of a Typical Off-Grid Renewable Energy Service.

Appendix 1

Qualitative Study on Criteria for Sustainable Operation of Off-grid Micro-Hydro Projects.

Set of Questions for Focus Group Discussion

Describe how does the electricity service changed your daily life? Can you please explain those changes (differences) with examples (probes: better light for children’s education, watching TV, agro-processing facilities, etc.)?

[Spend up to 10 min for this question. Encourage each participant to talk, as this is relatively easy question and everyone should have something to say.]

Question 1: Describe how you (as a community) decided to develop an energy project at your village? [10-15 min]

1. What was the process by which you got your project concept (own idea, replication of nearby project, expert help, etc.)?
2. What was the content of the initial project concept (domestic lighting, agro-processing, run enterprise, etc.)?
3. What were some of the main steps you have followed to come up with your final project proposal (location selection, discharge measurement, survey and DFS report, funding, etc.)?
4. What was the form of the community participation during that phase of project development (optimistic, full participation, proactive, willingness to contribute, etc.)?

Question 2: Describe the capital investment costs and different funding sources. [10-15 min]

5. Where did you get the funds (government subsidy, DDC/VDC grant, local NGO, etc.)? Have you had difficulties in mobilising funds? Have you also mobilised cash and in-kind contributions from local communities?
6. Did the project taken any loan? If so, how difficult was that? How did you repay the loan?
7. Did you experience any fund deficit during that time? Do you think the project could have been built differently (canal, poles, equipment, and other structures)?

Question 3: How does your project [management] supervise local customers and manage load growth? [10-15 min]

8. How did you select your customers? Did you ask them for a mandatory cash and in-kind contribution? Do you have HHs not having electricity connection? If so, why?
9. How did you determine expected load demand for households, commercial buildings and enterprises? Have you developed criteria for this purpose?
10. How do you manage your additional load demand (connecting new appliances), new connections and disconnections?

Question 4: How does your project utilise electricity in the productive sector? Do you notice small and medium enterprise (SME) growth at your village? [10-15 min]

11. Is there sufficient capacity for energy to be supplied to SMEs?
12. Do you think your location is more appropriate for some particular SMEs? Why?
13. Have some of you already involved in and/or are you considering setting up any business? What are the difficulties in setting up a new business?

Question 5: How does your project manage local power supply and demand? [7-10 min]

14. Do you know how much electricity (kW) is produced? Is there any seasonal variation in the electricity production? If so, why?
15. What is your maximum electricity demand? What time of the day does that happen?
16. Can your project supply the peak load demand now and in all other months? If not, explain how do you manage the situation?
17. Have you ever tried to shift/ reduce the peak load demand?
18. Have you ever introduced any financial incentive package for load management? Do you encourage local businesses (like agro-processing mills, furniture, etc.) to operate during off-demand hours?

Question 6: Have you noticed any growth in the plant factor? If yes, describe why and how the growth was possible? [7-10 min]

19. Do you know what percentage of total available energy of your project is utilised now? Have you ever noticed any changes (higher utilisation in certain months, improved over the last 3 years, etc.)
20. How can the plant factor (energy utilisation) be improved? Explain what are the constraints to plant factor growth (use of CFL and more efficient appliances, no SME growth, economic status, etc.)?
21. Have you ever taken initiatives for improving the plant factor (increasing operation hours, additional benefits for off-hours uses, SME promotion activities, etc.)  ?

Question 7: Describe revenue sources of your project explain how you monitor the financial transactions? [7-10 min]

22. Describe the revenue sources of your project (domestic customers, business and SMEs)? How much tariff do you collect every month?
23. How often is the electricity tariff revised?
24. How do you ensure timely collection of tariff? Do you have any reward/punishment policies for timely/untimely payment?
25. Describe your financial audits and public audit practices, if any?

Question 8: Can you tell me about the project ownership and explain how do you manage your project? [10-15 min]

26. Who is the owner of the project? Is it a legal entity (registered users committee, NGO, cooperative, company, etc.)?
27. Can you tell me more about the leadership selection practices?
28. Who is responsible for daily management of the project activities (executive members, staff team members, consultants, etc.)?
29. How do you ensure reliable and high quality electricity services? Can you give me an example? Explain how you retain trained staff (pay more salary, hire local people and train, etc.)? Who and how do you supervise their work?
30. How do you communicate with your customers (mass meetings, sharing of meeting minutes, feedback collection mechanism, etc.)?

Question 9: Explain the daily operation procedures of your power plant. Tell me more about how scheduled/sudden maintenance works are being managed? [7-10 min]

31. Who is responsible for daily operation of your power house and distribution system?  Can you explain how you got after sales services (from equipment suppliers and/or Installation Company)?
32. What was your experience doing scheduled/ sudden maintenance work? Were the O&M costs affordable? If not, how did you manage?
33. Can you please describe the major challenges you have faced to ensure uninterrupted power supply?
34. How do you get informed about blackout and other fault notices? How quickly do you respond to those faults?

Question 10: What is your overall experience in developing the energy project? What are the key challenges you have experienced for sustainable operation of the project? [10-15 min]

35. Describe the technical and financial support you have received. What was the role of government in building your project? How did the local government agencies support the project?
36. Is your project sustainable?  What are the important aspects of the project for overall performance?
37. How do you compare your project with others, if any? Why is your project different? Is there anything else you can add?

Thank you for your precious time to talk with us!

Appendix 2

Themes and List of Attributes

[1] Small-scale hydroelectric power plant up to 100 kW capacity. The power is generated by using the natural flow of water and supplied to local villages.

[2] The subsidy is based on the number of HHs electrified. But there are some thresholds so that project planners can’t increase the numbers just to obtain a higher subsidy.

[3] The plant factor is a ratio of energy consumed and available energy.