The SET4NPL project aims to transform Nepal’s public transport system through electric vehicles. The project will help private transport operators acquire 3,500 Electric Micro- and Mini-Buses (EMBs). Each bus comes as a complete package that includes a GPS device, an e-ticketing machine, an LED panel, a remote vehicle immobilizer, a basic maintenance contract, and either an emergency charger or a slow charger.

To support this initiative, the project will build a network of charging stations and implement an e-ticketing system across the country. Once completed, these changes are expected to significantly reduce greenhouse gas emissions – saving 1.65 million tCO2e directly and 3.5 million tCO2e indirectly throughout the buses’ operational lifetime.

The project aligns with the Government of Nepal’s policies and activities, especially Nepal’s Second Nationally Determined Contribution (NDC) submitted to the UNFCCC in 2020, which includes revising the microbus phase-out policy and broader goals for reducing emissions and promoting electric mobility.

The project aims to support widespread reform and electrification of public transportation in Nepal by:

1. Demonstrating the commercial and operational viability of EMBs to Public Transport Operators (PTOs) in Nepal.

2. Supporting and incentivizing PTOs to adopt EMBs as replacement of internal combustion engine (ICE) micro and minibuses.

3. Setting up and operationalizing Nepal’s first EV subsidy program, along with grant support for charging infrastructure.

4. Adoption of a digital ecosystem, including cashless payments, travel cards, mobile phone-based applications for commuters and PTOs, GPS tracking, and charging station management systems.

Since 2015, the Government of Nepal has prioritized the adoption of electric vehicles (EVs) for the transport sector. According to Nepal’s second enhanced NDC (2020), 20% of all public transport vehicles should be electric by 2025. Currently, PTOs run mostly diesel micro and minibuses. In 2019, public minibuses serviced over 7 million passengers daily. The Government of Nepal has initiated the transformation of large buses to electric, with Sajha Yatayat and Bagmati Province leading the procurement of full-size electric buses.

However, the micro and minibus segments face barriers such as high upfront costs and lack of financing options. By 2024, 5,700 diesel microbuses, primarily in Kathmandu, will reach the end of their lifecycle, presenting an opportunity for fleet renewal with EMBs. The project anticipates a one-to-one shift from diesel to electric vehicles, resulting in decreased traffic congestion and enhanced sustainable mobility solutions.

The goal of the project is to create a sustainable and inclusive electric mobility ecosystem by leveraging financial incentives, enhancing institutional capacities, and fostering private sector engagement. Project is still in the early stage of Implementation Phase, the expected outcomes and results by the end of the program are:

Outcome 1: Reduction of 1,652,422 tCO2e emission over the lifetime of the vehicles supported by the program.

Outcome 2: The number of daily passengers benefiting from the availability of EMBs is expected to increase to 20,000, with a focus on including 30% women.

Outcome 3: Aims to establish a financial mechanism that will outlast the program, ensuring the continued promotion of electric mobility in Nepal.

Outcome 4: The project is set to mobilize 97 million EUR in public finance for EMBs and charging infrastructure.

Outcome 5: Private finance mobilized directly by the SET4NPL is projected to reach 286 million EUR by the end of the program.

Outcome 6: In support of Nepal’s green COVID-19 recovery strategy, the SET4NPL aims to create 7,350 green jobs.

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About Project Video: https://www.linkedin.com/feed/update/urn:li:activity:7439604577634557952

Financial Subsidy Explainer Video: https://www.linkedin.com/feed/update/urn:li:activity:7441791624701186048

In coordination with: Ministry of Infrastructure Development

Donor: Mitigation Action Facility

Implementing Partner: GIZ Nepal and GGGI

SET4NPL Website: https://www.set4nepal.org/en/news