6.4.1 Government of Nepal shall gradually extend rural electrification. Appropriate institutional arrangement shall be made in this regard.
6.4.2 Appropriate arrangement to undertake rural electrification shall be made while awarding the distribution license.
6.4.3 Rural electrification shall be encouraged in the rural areas affected directly from the electricity generation project. Energy royalty on the electric energy consumed in such an area shall be exempted. Such exemption shall be given until the first fifteen years of the commencement of commercial production.
6.4.4 One per cent of the royalty obtained by Government of Nepal from a hydropower project shall be provided to the Village Development Committees that are directly affected by the hydropower infrastructure with the sole purpose of expanding electrification of these Village Development Committees.
6.4.5 A Rural Electrification Fund shall be established for the development of micro hydropower and rural electrification by pooling in a certain percentage of the amount received as royalty.
6.4.6 Government of Nepal shall provide grant through the Alternative Energy Promotion Centre to the domestic private sector to generate and distribute electricity by building hydropower centre of up to 100 kW capacity at the rural level. Moreover, such projects shall be included in the prioritized loan sector, and facilities shall be provided to such projects accordingly.
6.4.7 Electricity shall be supplied from small hydropower projects in the mountainous rural area falling outside the access of the national power system. Provision shall be made to hand over the responsibility of operation and maintenance of such small hydropower projects to the local cooperative groups and these groups shall also be involved in the course of formulation and implementation of plans.