Renewable Energy and Climate Adaptation E3.Nepal Model Handover to Policymakers and Regulators Capacity Building Workshop

Nepal stands at the forefront of experiencing adverse impacts of climate change, with its unique geography and socio-economic conditions amplifying exposure to climate risks and environmental change. To address these concerns, Nepal has developed comprehensive climate action frameworks that demonstrate ambitious targets requiring massive international support.

Nepal’s third Nationally Determined Contribution (NDC 3.0) establishes transformative clean energy expansion from 1,400 MW to 15,000 MW by 2030, with conditional targets requiring over USD 55 billion and unconditional targets of USD 9.5 billion in domestic resources. While the country maintains 45% forest cover commitment while managing 50% of Tarai forests and 25% of hills/mountain forests sustainably, Nepal targets carbon neutrality by 2045 and net-zero emissions by 2050, requiring USD 196 billion total investment.

With limited budgets and scarce resources – including human, technical and institutional – Nepal faces the challenge of maximising the impact of policy interventions. In this context, ex-ante policy analysis becomes essential as it enables policymakers to compare costs and benefits of different approaches before implementation, identifying which interventions offer the greatest protection and return on investment. This forward-looking analysis helps avoid unintended consequences that could exacerbate vulnerabilities, particularly important given the interconnected nature of Nepal's climate challenges.

IRENA has developed a tailored Energy-economy-emission Model (e3.Np) for Nepal with country data and targets to bridge this gap by providing a macroeconomic tool tailored to Nepal's national context. To strengthen national capacity in using this tool, IRENA organised a training workshop that informed policymakers of IRENA's assessment and supported national experts to modify and adapt scenarios to reflect Nepal's national priorities and perspectives.

Working closely with ministries and key sectoral institutions, IRENA facilitated knowledge transfer and strengthened institutional capabilities through targeted training and technical assistance. The key rationale was to strengthen national policymakers' capacity for independent assessment, enabling coherent policy decisions that integrate development and climate objectives across sectors.

The workshop brought together 12 participants from various ministries – including the Ministry of Energy, Water Resources and Irrigation and Ministry of Forest and Environment – as well as academia, experts, and other relevant stakeholders, making it a highly engaging and productive session. The workshop was supported by The Institute of Economic Structures Research (GWS). Participants highlighted critical challenges and opportunities for advancing Nepal's renewable energy transition.

During the workshop, Dr Ram Prasad Dhital, Chairman of the Electricity Regulatory Commission, noted that although Nepal has seen growing use of renewable energy, "weak grid infrastructure, limited transmission and distribution systems, and inadequate regulatory and institutional capacity remain major bottlenecks." Financial constraints and the absence of viable business models further hinder progress. Dr Dhital also emphasised that IRENA could help address these challenges by supporting evidence-based policy reforms, developing cost-reflective tariff structures, and strengthening institutional capacity across government, utilities, and the private sector.

Dr Maheshwor Dhakal, Chief of Climate Change and Management Division at the Ministry of Forests and Environment, highlighted that "political stability and an enabling environment for private sector investment are crucial for advancing renewable energy." As one of the most climate-vulnerable yet resource-rich countries, Nepal must encourage private sector participation to achieve net-zero emissions and contribute to global climate adaptation. He stressed the value of collaborating with international institutions like IRENA to facilitate knowledge sharing, technology transfer, and capacity building.

Similarly, Tika Ram Baral, Joint Secretary at the Water and Energy Commission Secretariat (WECS), emphasised improving energy efficiency through modern technologies and greater awareness of sustainable energy use. He underlined IRENA's potential to support Nepal in policy formulation and capacity development, particularly through collaboration with WECS in designing strategic policy frameworks to guide government action in the renewable energy sector.

Overall, the event was a success,  marking a meaningful step towards strengthening collaboration between IRENA and Nepal towards a more sustainable, resilient, and low-carbon future. This is part of IRENA's ongoing efforts to support its Member States to integrate global best practices in their national planning processes.