Rural Power Supply with Local Management: Examples from Bolivia, India and Nepal

The report evaluates local management of rural electrification in Bolivia, India, and Nepal, concluding that it is a feasible approach in developing countries that can lower costs and accelerate load development. Key findings highlight that success depends heavily on local willingness, clear national policies, and initial technical and financial assistance. While some co-operatives in Bolivia failed due to poor management and restrictive profit laws, others, like CRE in Santa Cruz, thrived by serving both urban and rural loads. In India, co-operatives showed higher electrification rates than state-run schemes, though they struggled with top-down control and fixed tariffs. In Nepal, micro-hydro projects managed by local committees or shareholder companies proved effective in remote areas, often supported by international NGOs.

• Local management of rural power supply is a viable approach in developing countries, capable of slightly reducing electrification costs and accelerating the pace of load development in new areas.
• The most critical factor for the success of local organisations is the willingness of the local population to develop their own region, which can outweigh risks such as poor dividends.
• Local organisations typically require significant financial and technical support during their initial years of operation to achieve self-reliance.
• In Bolivia, the Cooperativa Rural de Electrificacion Limitada (CRE) in Santa Cruz is a highly successful model because it serves both urban and rural areas, using urban revenues to cross-subsidize rural costs.
• Many Bolivian co-operatives, such as those in Mizque and Capinota, failed due to poor administrative management, lack of technical expertise, and a government law limiting annual profits to 9% of investments.
• Indian rural electrification co-operatives generally achieve higher electrification rates and better service than state-managed schemes; 34 of 37 co-operatives reached 100% area coverage.
• A major challenge for Indian co-operatives is the top-down nature of their formation and the lack of influence over tariffs, which are fixed by State Electricity Boards (SEBs).
• In Nepal, micro-hydro projects managed by local committees (like Ghandruk) or shareholder companies (like SCECO) are effective alternatives to the national grid in remote areas.
• The Ghandruk project in Nepal demonstrated that local management can reduce costs significantly, with estimates suggesting costs were 60% lower than a comparable national utility programme.
• The Andhi Khola Hydel Rural Electrification Project (AHREP) in Nepal implemented innovative low-cost technical solutions, including a 1 kV distribution system to reach scattered consumers more cheaply.
• External assistance from agencies like USAID and NRECA is often essential for the implementation of locally managed systems, but withdrawals of such aid can lead to the collapse of co-operatives.

APA

Gerger, A., & Gullberg, M. (1997). Rural Power Supply with Local Management: Examples from Bolivia, India and Nepal. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/SEI-Gerger-RuralPowerSupplyWithLocalManagement-1997.pdf

Chicago

Gerger, Asa, and Monica Gullberg. Rural Power Supply with Local Management: Examples from Bolivia, India and Nepal. Stockholm Environment Institute, 1997. https://www.sei.org/mediamanager/documents/Publications/SEI-Gerger-RuralPowerSupplyWithLocalManagement-1997.pdf.

Wikipedia

{{cite report |last1=Gerger |first1=Asa |last2=Gullberg |first2=Monica |title=Rural Power Supply with Local Management: Examples from Bolivia, India and Nepal |publisher=Stockholm Environment Institute |date=1997 |url=https://www.sei.org/mediamanager/documents/Publications/SEI-Gerger-RuralPowerSupplyWithLocalManagement-1997.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gerger1997rural, author = {Gerger, Asa and Gullberg, Monica}, title = {{Rural Power Supply with Local Management: Examples from Bolivia, India and Nepal}}, institution = {Stockholm Environment Institute}, year = {1997}, url = {https://www.sei.org/mediamanager/documents/Publications/SEI-Gerger-RuralPowerSupplyWithLocalManagement-1997.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }