Approaches and Delivery Mechanism

Approaches for Promotion of PEU:

The PEU Component will follow different approaches (Figure) to upgrade/establish MSMEs in the vicinity of RE catchment area, as described below:

Business Development Approach:

  • Explore and select existing MHPs with potential MSMEs demonstrating substantial market demand and growth potential.
  • Conduct assessment for the feasibility of establishing or upgrading MSMEs in the selected MHP. 
  • Potential entrepreneurs will be provided required services, such as awareness creation, skill and entrepreneurship development trainings, linkages with appropriate technology providers, after sales service and linkages with Business Development Service (BDS) providers, creating access to finance and market
  • Replicate best model/practices to other areas for gradual expansion of MSMEs to achieve PEU targets.
  • Collaborate with potential partners and relevant stakeholders to support entrepreneurs/ enterprises.

New and Innovative Business Development Approach:

  • Identification of product/services based on local resources and capacities, be powered (at least partially) with RE and lead to income and employment generation for the communities.
  • Conduct assessment for the feasibility of establishing MSMEs in the selected product/services considering entrepreneur’s interest, socio-economic benefits, marketability and suitability of energy source. 
  • Potential entrepreneurs will be provided required services, such as awareness creation, skill and entrepreneurship development trainings, linkages with appropriate technology providers, after sales service and linkages with BDS providers, creating access to finance and market.
  • Piloting will be conducted in selected locations and an assessment will be conducted to evaluate the lessons to be learned and work as reference for the replication of activities.
  • Collaborate with potential partners and relevant stakeholders to support entrepreneurs/ enterprises.

RETs for Enterprise Approach:

  • Collect demand from entrepreneurs to install RETs for establishing/upgrading of the enterprises/businesses.
  • Carry out rapid assessment of the enterprises as demanded by entrepreneurs. 
  • Coordinate with Technical Support Component for DFS to establish RET for operation of enterprise/business.  
  • Entrepreneurs will be provided required services, such as business management trainings, linkages with appropriate technology providers, after sales service and linkages with BDS providers, creating access to finance and market.
  • Collaborate with potential partners and relevant stakeholders to support entrepreneurs/ enterprises.

Business As Usual Approach (Spontaneous Demand):

  • Collect demand from entrepreneurs after the RETs are installed /commissioned.
  • Carry out rapid assessment of the enterprises as demanded by entrepreneurs. 
  • Entrepreneurs will be provided required services, such as technical skill trainings, linkages with appropriate technology providers, after sales service and linkages with BDS providers, creating access to finance and market.
  • Collaborate with potential partners and relevant stakeholders to support entrepreneurs/ enterprises.
Figure: Approaches for Promotion of PEU

Subsidy Delivery Mechanism:

The support to end use development will be in the form of grant to the entrepreneurs to establish enterprises that are run by energy generated from RETs. The implementation cycle of the subsidy delivery mechanism is shown in Figure 1 (Field Implementation Cycle). The entrepreneurs should follow the following steps also shown in Figure 2 (Subsidy Delivery Mechanism) to receive the subsidy. The fund flow mechanism is shown in Figure 3 (Fund Flow Mechanism).


Figure 1: Field Implementation Cycle


  • In order to receive PEU subsidy, the prospective entrepreneur must prepare a business plan and register at relevant Government offices.
  • The business plan must be forwarded to the LED/ Management Committee accompanied by filled up subsidy form. 
  • RSCs/ BDS providers will assist the potential entrepreneurs in preparing the business plan.
  • The LED/ Management Committee compiles the requests received from prospective entrepreneurs, prioritizes them (based on GESI, power availability, energy consumption, appropriate technology, cost optimization, etc).
  • RSCs will assist the community in preparing the financial analysis of RETs for tariff fixation.
  • The LED Committee will prepare Fund Operating Guidelines for the transfer of funds to entrepreneurs. 
  • RSCs will assist in preparing the fund operating guideline of the RETs.
  • The individual entrepreneurs using energy generated from isolated RETs (not community based) must prepare a business plan and forward the request to RSCs with recommendation from VDC. 
  • RSCs will assess and forward the business plans and relevant documents to DECS with recommendation.
  • DDC will endorse business plans and relevant documents for CE based micro enterprise and recommend AEPC for release of subsidy to District Energy Fund (DEF) or Micro Enterprise Development Fund (MEDF). For all other enterprises, business plans and relevant documents will be forwarded to AEPC with endorsement from DDC. 
  • AEPC will forward business plans to CREF with recommendation for the release of subsidy after the appraisal of received documents. 
  • CREF will release the subsidy as per the RE Subsidy Policy 2069 and RE Subsidy Delivery Mechanism 2070 to DEF/MEDF, LED/Management Committee bank accounts or individual entrepreneurs’ bank accounts based on the type of enterprises. Such bank accounts should be opened in nearby LFIs. 
Figure 2: Subsidy Delivery Mechanism
Figure 3: Fund Flow Mechanism