Activity : Nepal Electric Vehicle Program
Sector(s): Environmental Technology
Partners : U.S. Embassy, U.S. Asia Environmental Partnership, Global Resources Institute, the Department of Transportation, His Majesty's Government of Nepal, and Nepali private firms and individuals.

Brief Description: Traffic moves slowly in Kathmandu's ancient and narrow city streets and distances travelled are relatively short. Currently, there are 3,500 three-wheeled vehicles, tempos, clogging Kathmandu's streets. These three-wheelers are the most common form of public transportation in the Kathmandu Valley. They account for 25 percent of all vehicular traffic in the city and contribute over 60 percent of vehicular emissions. A very conservative estimate of the cost of this level of air pollution is $10 million per annum in lost worker productivity, health care costs, and losses from tourism. Electric vehicles provide an exceptional opportunity to reverse this trend.

In 1993, the U.S. Asia Environmental Partnership (USAEP) provided a modest grant to Global Resources Institute (GRI), a U.S.-based environmental non-governmental organization, to convert one diesel tempo to run on electric power. Following a successful demonstration, USAID/Nepal and USAEP provided additional funding to develop seven more electric tempos, and to demonstrate the technical and economic viability of operating the vehicles for public transportation. More than 200,000 passengers travelled over 175,000 kilometers throughout Kathmandu in just six months, demonstrating the viability and cost efficiency of using electric vehicles as a major source of public transportation in Nepal. This demonstration sparked the interest of private industry and now, only one year later, an electric vehicle industry is taking root in Nepal.

Accomplishments/Benefits: On February 20, 1996, the keys to the fleet of seven electric tempos were passed from GRI to the owners of the Nepal Electric Vehicle Industry (NEVI). This private consortium of Nepali firms and business leaders not only will continue operating the existing tempo fleet but has plans to import and operate 23 additional electric tempos on the busiest transport routes of Kathmandu within three months. The goal is to have 100 tempos operating by year's end.

Discussions have taken place with over 50 private Nepali companies and individuals who are interested in either manufacturing or operating electric vehicles. USAID and GRI showed the way for these firms by negotiating key fiscal reforms which provide financial incentives for private sector investments in electric transportation. In addition to NEVI, two private companies have been registered to operate electric public transportation networks, which is unprecedented in Asia. Two of these private firms plan to manufacture, assemble, import and service electric vehicles. A local dairy wants to purchase 40 electric delivery vehicles. Other South Asian countries have already expressed an interest in acquiring electric vehicle technology for their own public transport systems.

An increasingly liberal macro-economic policy environment has sparked the growth of a dynamic private sector. The Government has reduced duties on electric vehicle componentry and reduced income taxes for investors. Nepal is poised to take the lead in importing, manufacturing, assembling and operating appropriate types of electric vehicles. To encourage development of this nascent industry, USAID and GRI are assisting investors to establish viable electric vehicle enterprises, establishing training programs for technicians and operators, and lobbying government for additional incentives for investors.

U.S. Impact: Apart from addressing the egregious air pollution in the Kathmandu Valley, the Nepal Electric Vehicle Program has attracted U.S. investment to Nepal. U.S. environmental technology has been successfully introduced in Nepal, and U.S. manufacturing companies have entered into partnership with Nepali firms to produce electric vehicles.

Contact Persons: James Gingerich and Roger Bloom, Office of Agriculture and Rural Development
Mission Address: USAID/Kathmandu, Department of State, Washington, D.C. 20521-6190
Washington Contact Person: James Van Den Bos, Nepal Desk Officer

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