At the moment, the Nepali transport system is completely reliant on imported fossil fuels which make it vulnerable to price variations on the global market. Especially in metropolitan areas, combustion engine vehicles are contributing to poor air quality, affecting people’s health. Moreover, the transport sector is responsible for 36% of total annual energy sector related GHG emissions in the country.
The Government of Nepal (GoN) has recognized the adoption of EVs as a key priority but several barriers have hindered progress in the transport sector. Fundamentally, policy measures to incentivize electric vihicles (EVs) are in place but the available know-how and the ability of actors to develop and enact business and financial models are insufficient. According to Nepal’s second Nationally Determined Contribution (2020), 20% of all public transport vehicles should be electric by 2025.
Public micro and minibuses serviced more than 7 million passengers daily in 2019. Interventions towards EV adoption have so far not targeted the micro and minibus segment even though it is substantial, growing, and has the largest transformation potential of all public transport sub-sectors in Nepal.
GIZ is supporting Nepal together with its partner Global Green Growth Institute (GGGI) with transitioning the Nepal’s transport sector towards electric mobility by focusing on the mini- and microbus sector and utilizing its domestically produced hydro-power based electricity to power vehicles and reduce the import of fossil fuels and the trade deficit linked to it.
GIZ and GGGI want to promote the electrification of the public transport sector in collaboration with Nepal’s public and private actors. This should be reached by the introduction of EVs fulfilling set quality criteria, sound business models, and affordable financing mechanisms for public transport operators to purchase electric micro- and mini-busess and charging stations. Besides operators, GIZ is cooperating with relevant stakeholder like ministries, federal and provincial governments, the national electricity authority, banking and financing institutions, and the private sector.
For various reasons, electric mobility is seen as a great opportunity for Nepal:
EVs can be powered by the carbon neutral hydropower electricity.
Using the country’s own potential for renewable energy in the transport sector will make it more independent from fossil fuel imports and help in reducing its trade deficit.
GHG emissions will be reduced, contributing directly to Nepal’s plan for decarbonization.
Air quality will improve, benefitting the health many people.
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