The main sources of fund for the program will be UNDP and IDA/World Bank. The program will follow the GoN's Rural Energy Policy (2006) and Subsidy Policy for Renewable Energy (2006) to implement its initiatives. UNDP will provide technical assistance which will be directly channelled through the PMU. The World Bank's fund will be channelled through AEPC which will be allocated to implement district level activities under grant/subsidy policy of the Government to install Micro Hydro Schemes. Flow of fund is contingent upon the approval of Annual and Quarterly Work Plan by the PEB. For UNDP's fund, the PMU will prepare quarterly plan according to the NEX/NIM modality. Based on the approved quarterly work plan, the NPM will request UNDP for quarterly advances. Yearly advance of IDA/WB fund will be delivered as grant to DEF through District Development Fund (DDF) upon the approval of PEB. For channelling of fund from AEPC to DEF, the AEPC and respective DDC will sign a Memorandum of Understanding (MOU) based on the approved work plan. In addition, as practiced in REDP, DDC will continue to allocate 5% of its resources for renewable energy related project in the proposed project sites. Similarly, the budget for activities to be implemented directly by RERL Kathmandu Office will be deposited into RERL account.
The project fund will channelize from RERL to DEF as per the work plan. As per the current practice, the EDO and LDO will be the signatories for the operation this account.
At the district level, the fund will flow from DEF to the accounts of the Support Organization and Functional Groups under MOUs between DDC and concerned parties. EDO and Coordinator of SO will be the signatories of SO account. Similarly, the EDO and Chairperson or Manager of FG will be the signatories of FG accounts.
The fund flow mechanism is illustrated as below.