Solution exchange discussion: Watermill Based Energy for Enterprise Development, from SIMAR, Uttaranchal

A consolidated reply of experiences and examples shared by various members of the Solution Exchange Water Community

Compiled by Pankaj Kumar S., Resource Person and Ramya Gopalan, Research Associate, 30 December 2006

From B. M. Kandpal, SIMAR, District Chamoli, Uttaranchal

Posted 29 September 2006

Our agency works in remote villages of Higher Himalayas of Chamoli district of Uttaranchal, characterized by mountainous terrain. The economy is subsistence based due to rainfed agriculture, poor marketable surplus and inadequate development of industrial infrastructure. However, there also exist tremendous opportunities in organic products, medicinal and aromatic plants, fruits, off-season vegetables and Eco-tourism. Additionally, there are numerous watermills which can become prime-movers for local enterprises, if upgraded for power generation.

We are in the process of preparing a proposal for a project for upgrading traditional watermills into power generating units (0.5 to 5 KW) for livelihood promotion. Expected components are likely to be identification, technical pre-feasibility of watermill sites, economic pre-feasibility and capacity building of village communities and entrepreneurs in maintenance of watermills and running enterprises.

In the above context, I request members to please give inputs on the following:

  • Experiences and precautions from other states in implementing and institutionalizing decentralised energy based livelihood promotion projects.
  • Advice on kinds of small enterprises, which can be set up using power generated and where these machines are available.
  • Manufacturers of machines for food processing (flourmill, etc.), fruit processing (driers, juicers, peelers, pulpers, etc.), oil expellers, and distillation units known to members
  • Funding sources i.e. government agencies, donors, foundations who may be interested in supporting such a project.

Responses were received with thanks from

1.  Vinod Kumar, Maithri, Palakkad, Kerala
2.  Ramesha C. Gowda, Karnataka State Pollution Control Board, Bangalore
3.  Prabhjot Sodhi, UNDP GEF SGP, New Delhi
4.  Anil Arora, UNDP, New Delhi
5.  Shirish Sinha, New Delhi
6.  R. Sreedhar, Environics Trust, New Delhi
7.  Monali Ranade, UNDP, New Delhi
8.  Bashu Aryal, Western Uplands Poverty Alleviation Project, Kathmandu, Nepal
9.  Jyotsna Bapat, Senior Consultant, New Delhi
10.Rahul Banerjee, Aarohini Trust, Indore
11.Pankaj Kumar S, UNDP, New Delhi

Further contributions are welcome!

Summary of Responses

The query on upgrading watermills for power generation and setting up village enterprises stimulated members from various parts of the country to share their experiences in micro-hydropower (MHP) and suggest enterprises that could be taken up and the possible funding sources for such projects.

An experience from Kerala related that pumps could be used as turbines using off-the-shelf equipment. In this project, community representatives have been trained in site selection, survey, installation and maintenance of the power generating units. Another experience from Uttaranchal showed that simple technology, involving village people at all stages of the project and proper capacity-building are important ingredients for a sustainable MHP project. The group also acknowledged Nepal’s rich experience in MHP, and mentioned the UNDP project by REDP, which has mobilized village communities to set up power generation units and enterprises in many villages. On the other hand, the experience of Narmada Bachao Andolan (NBA) in Maharashtra in village Bilgaon revealed a number of problems, in spite of the very high voluntary labour contribution by village people. The agency was refused permission for power generation; the scattered settlement also meant high transmission and distribution losses. Recently, the turbine has also been damaged in monsoons.

In the above context, respondents drew out various process learnings on community-based MHP. Thus the group emphasized the primacy of involving the village community at every stage during project implementation to ensure long-term sustainability. Setting up an institution to frame and implement well- defined rules and regulations for power generation, maintenance and distribution was another crucial intervention members mentioned. They also cautioned that the rules and regulations should be allowed to evolve as a natural process and not be forced by external agencies. This is because only if people have a genuine interest and need for the project, will they take care of the plant after installation. Participants also underlined the need to plan livelihoods with the community in a transparent manner without making any false promises to ensure that the tone of the whole venture stresses village community’s ownership. The institutional structure also needs to look at forward linkages when products will be collectively marketed, as in Self Help Group federations.

Respondents also pointed out that there is often a mismatch between locations where power is required and where it is produced, leading to a situation where excess power is available in some locations, while other villages are starved for power. They suggested that before initiating a MHP project, the implementing agency ask a very simple question– what will this power be used for? In any proposed site, implementation needs to start with an economic analysis of local products and their value chain analysis only after which should power generation start. Members also stressed that since the process issues were of utmost importance for long-term sustainability of MHP ventures, donors should avoid driving these projects by “fund spending” and quick-fix approaches but should provide funds and time needed for such projects to evolve.

On viability, members stressed that power generation in MHP entailed all operations of large power generation like production, distribution, supply and recovery of costs. The low output of these plants and the cost of technical and institution therefore makes a single MHP plant unviable. Consequently, the group proposed planning installation of a cluster of microhydels to reduce overhead costs of technically trained staff. Such clusters could also deal better with a minimum scale of value addition of local products, making better economic sense.

The discussion also touched on technological issues in MHP and underscored the need to keep the technology simple so that local communities can take up minor repairs on their own, even if a “lower” technology meant a little loss in efficiency. Thus the Kerala project used off-the-shelf pumps as turbines, and the Malari project opted for cross-flow turbines because they were easier to maintain. NBA’s experience shows that people’s organisation can provide support and facilitate implementation but long-term maintenance needs a strong institutional support base. Members underlined the need for the government to provide pro-active support to MHP initiatives through technical and financial assistance.
The utmost importance of imparting intensive training of village communities to take up routine maintenance and repairs also came out in the discussion.

Participants also shared their experience in upgrading watermills for power generation and cited a study by TERI under the UNDP-GEF Hilly Hydro Project which had mapped watermills in Indian Himalayas and had upgraded 50 watermills in Arunachal. The basic steps in such upgradation were improving water flow and its impact direction on runners, replacing wooden runners with metal runners, and improving grinding stones. Respondents reported a reduction in processing time of grain, but felt that since the services were localized and restricted to grain processing, the project impact was limited. The group also suggested looking at the experience of Nepal and HESCO in Uttaranchal in upgradation of
watermills. The entrepreneur run watermill implemented by Alternate Hydro Energy Centre, Roorkee at Neergad could also be looked at, felt members. In this context, members cautioned that watermill based enterprises for livelihoods are best owned by individuals running enterprises or by an organization (e.g. NGO) to run and manage such projects.

Respondents suggested the following types of small enterprises could be set up using MHP:

Enterprises targeting local use: flour/pulse mills, oil extraction units, agro-based activities such as threshing, power tiller, processing of local agri-products, wool processing, etc.
Market focused enterprises:
o        Medicinal and aromatic plants- primary processing - Aromatic oil extraction, drying, cleaning, grinding and packaging, preparation of incense, etc.
o        Wool - Carpet and Shawl industry
o        Agriculture and horticulture- cleaning, grinding and packaging local spices/ condiments, pre-processing fruit into pulp, juice, jam-jelly, pickles etc.,
o        Processing of forest based products-wild apricot oil, deodar oil, seabuckthorn juice
o        Others-iodizing and packaging salt, bottling special quality drinking water. From Nepal - poultry farming, battery charging, potato chips, photo studio and video theatre

Other successful projects discussants mentioned in this regard were by INHERE, Almora and Centre for Technology Development, Sahaspur. Ministry of Food Processing Industries, FICCI AgriBusiness Centre and directory listings like ‘’ could be other important information sources.

The issue of funding of MHP linked enterprises was also discussed. The group pointed out that the lack of dialogue between donors supporting power generation and those funding enterprise development was a major lacuna in existing financing patterns. Donors need to provide integrated funding for MHP- enterprise-livelihoods projects. Financial support also needs to incorporate investing in institution building and capacity building for long-term sustainability, underlined members.

Government funding for MHP was also available in the form of subsidies for upgradation of watermills by MNES, explained respondents. Similarly, most banks and lending institutions have special schemes for supporting enterprises. Members also suggested that as in Kerala, the capital costs of MHP based enterprises could be borne by local community/entrepreneur/bank loan/ local self-government or a combination of the four. Innovative proposals where beneficiaries can generate co-funding could be funded by the GEF Small Grants Programme. Participants also identified carbon trading as an opportunity to bring funding for MHP projects.

Offering valuable suggestions on initiating watermill-based enterprises, the discussion urged agencies funding and implementing MHP to look at power generation, enterprise development and livelihoods as one continuum. Unless such a change in thinking takes place at various levels, micro-hydropower will continue to be restricted to select pockets of excellence.

Comparative Experiences


Community Based Small Hydro Projects (from Vinod Kumar, Maithri, Palakkad, Kerala) Installed by Maithri in the high ranges these projects (0.5 to 50 KW) use ordinary pumps modified- coupled to single phase AC generators or running the conventional induction motor depending on power demands. The electro mechanical unit may cost 10000/Kw transmitting power to an area of 1 km radius. After installation, the concerned communities run the schemes and sometimes, local community, bank loan, local government meet the capital cost.


Project for Enhancing Livelihoods (from Prabhjot Sodhi, UNDP GEF SGP, New Delhi) The project aimed at community owned, managed and constructed hydropower generating unit and for using renewable through energy efficient devices to increase and improve livelihood opportunities. The immediate project beneficiaries would be 113 families in the village and the extended benefits would reach to about 700 families. A Village Energy Committee set up is responsible for managing the community’s collections and contributions.

Read more

Arunachal Pradesh

Technology Upgradation of Existing Watermills (from Shirish Sinha, New Delhi) Fifty projects were set up under the technology upgradation component, upgrading existing watermills. Technology upgradation included a few basic steps such as improving the water flow and direction, replacing runners, and changing grinding stones. The watermills though owned by individuals provided energy services to local people. Benefits included a reduction in time for processing grain. However, impact was limited due to localized demand for services.


Bilgaon Microhydel Project (from Rahul Banerjee, Aarohini Trust, Indore) A waterfalls caused by the Udai River, enabled the conception of the project by the construction of a
concrete dam, at one end of which an opening feeds into a channel that diverts some of the Udai's flow feeding water into a large tank built on a slope high above the Titodi. From the base of the tank, a sturdy metal pipe runs eight metres downhill into a concrete shed that houses a turbine and generator, thereby
providing fifteen thousand watts of electricity.

Read more



Model Energy VDC (from Bashu Aryal, Western Uplands Poverty Alleviation Project, Kathmandu, Nepal) The Bhoksing VDC, of the 55 VDCs in Parbat district, has become the first VDC that has electricity access to its all 234 households by the installation of two micro hydro plants, two plethoric sets and 17 solar home systems. Additionally, all the households have constructed the improved cook stoves, which have helped reduce the fuel wood consumption by about 30%.

Related Resources

Recommended Organizations

From Monali Ranade, UNDP, New Delhi

Ministry of Food Processing Industries, New Delhi
Panchsheel Bhawan, August Kranti Marg, New Delhi 110049
Provides a compendium of manufacturers, machines and technologies available for food processing, fruit processing, etc

Agribusiness Information Centre (AIC) Federation of Indian Chambers of Commerce and Industry (FICCI), New Delhi
4th Floor, Federation House, Tansen Marg, New Delhi 110001; Tel.: 91 11 23738760-70; Fax: 91 11
23721504, 23320714;
Provides information on funding schemes and sources available for supporting watermill based and other relevant projects

UNDP Rural Energy Development Programme, Nepal (from Bashu Aryal, Western Uplands Poverty Alleviation Project, Katmandu, Nepal)
Provides details on the program, which complements the rural electrification Plan objective; promoting micro hydro schemes, solar and wind energy and biogas schemes

Himalayan Environmental Studies and Conservation Organisation (HESCO), Uttaranchal (from Shirish Sinha, New Delhi)
Vigyanprasth, Gwar Chauki, PO Gholtir, District Rudraprayag, Uttaranchal 246438; Tel: 91-135-642391;
Fax: 91-0135-642391;
Recommended for their experience on community owned approaches to watermill based projects

IIT Alternate Hydro Energy Centre (AHEC), Roorkee (from Anil Arora, UNDP, New Delhi and Shirish Sinha, New Delhi)
Indian Institute of Technology, Roorkee, Roorkee 247667, Uttaranchal; Tel: 91 1332 274254, 285213; Fax: 91-1332 273517, 273560;
Recommended for its experience and as a nodal agency for knowledge dissemination on decentralised power generation in Uttaranchal

Centre for Technology & Development (CTD), New Delhi (from R. Sreedhar, Environics Trust, New Delhi)
D 158, Lower Ground Floor, Saket, New Delhi 110 017
Recommended for work in Science & Technology development and application for sustainable development, particularly in rural areas particularly field station in Sahaspur

UNDP GEF SGP Programme India (from Prabhjot Sodhi, UNDP GEF SGP, New Delhi (Size: 656 KB)
For details of the UNDP GEF Small Grants Programme which provides grants to organizations for
activities that address local & global environmental problems

Small Hydro Power Programme (from Ramya Gopalan, Research Associate)
This Programme of the MNES covers all aspects such as the potential, incentives, commercial projects, identified sites and costs within the Small Hydro Power Programme

Recommended Contacts and Experts

From Anil Arora, UNDP, New Delhi

Dr. Arun Kumar, AHEC
Indian Institute of Technology, Roorkee, Roorkee 247667, Uttaranchal; Tel: 91 1332 274254, 285213;
Fax: 91 1332 273517, 273560;
For information on funding available, manufacturers and the livelihood activities taken up as a result of privately owned and community managed water mills

Dr. Praveen Saxena, Ministry of New and Renewable Energy (MNES)
Block-14, CGO Complex, Lodhi Road, New Delhi 110 003
For details on the subsidies provided by MNES for watermill based energy and entrepreneur development

P.S. Sodhi, GEF Small Grants Programme
Centre for Environment Education (CEE), D-35, 1st Floor, South Extension - II, New Delhi, 110049; Tel.:
91 11 26262878; Fax: 91 11 26262880;,
For additional information on the Small Grants Programme for innovative project proposals with large replicable impacts and where beneficiaries can generate co-funding

Bharat Bishtji, Institute of Himalayan Environmental Research and Education (INHERE) (from R. Sreedhar, Environics Trust, New Delhi)
Masi Bazar, Masi-263 658, Distt. Almora, Uttaranchal; Tel.: 91 5966 25717, 257374; Fax: 91 5966 25717
For information on manufacturers of machines for food processing and other huge advances made particularly in fruit processing using watermill based energy

Recommended Portal and Information Base

Maharashtra Industries Directory (from Monali Ranade, UNDP, New Delhi)
Provides listings and other information on manufacturers of machines for food processing (flour mill, etc.), fruit processing, oil expellers, and distillation units

Recommended Documentation

From Rahul Banerjee, Aarohini Trust, Indore

Adivasi Village of Narmada Valley Achieves Energy Self-Sufficiency; Bilgaon Electrifies itself with 15 KW Micro-Hydel Project NBA Press Release
Accounts the Bilgaon success story and the demand in the adivasi villages in the Narmada valley for alternative sources to meet their energy needs

Current of Patriotism: Thousand Points of Light in Bilgaon
Step-by-step account of how two young engineers from Kerala along with two others and the Bilgaon villagers themselves, helped implement the project they had designed

Enhancing Livelihoods and Conserving Mountain Environment in Marginalised areas of the Himalayas (from Prabhjot Sodhi, UNDP GEF SGP, New Delhi) (Size: 1.1 MB)
Provides details of a project supported by UNDP GEF SGP in Tehri Garhwal, Uttaranchal

From Shirish Sinha, New Delhi

UNDP/GEF Hilly Hydro Project
 Details the project which aimed at the optimum utilization of small hydel resources in the Himalayan and sub-Himalayan regions

Subsidy Scheme for Development/Upgradation of Water (Size: 24KB)
Provides details on the MNES subsidy aimed at promoting watermills

From Ramya Gopalan, Research Associate

From Age Old Watermills to Modern Energy and Information Technologies
Parthan Binu and Subbarao Srikanth; IT Power India Pvt. Ltd, Pondicherry (Size: 177 KB)
Details interventions with the watermillers community in the Indian Himalayas emphasizing on the technologies employed and transferred, and local capacity building

Small Hydro Power Annual Report
Ministry of Non-Conventional Energy Sources, Government of India; 2005 - 2006
Details plans for and status of Small Hydro Projects particularly Development/Upgradation of Water Mills in the Himalayan Region

Watermills to Light up NE
The Financial Express; March 4, 2006
Brief on HESCO’s plans to install watermills in Nagaland and Manipur as part of its 'Technology-for-Peace' Programme in association with the Indian Army

Himachal Watermills Generating Electricity
Times Foundation
Article on a project initiated by the state government with help from the MNES to turn the existing traditional water mills of Himachal Pradesh into electricity generators.

IT Power’s Watermills: Promoting Renewable Energy in Uttaranchal
InfoChange News & Features, June 2004
Brief on IT Power’s renewable energy project in the hill state of Uttaranchal supporting improvements to around 55 traditional watermills.

Kerala to Frame Micro Hydel Power Policy
Business Line; September 29, 2006
Brief on the State Government’s potential to host at least 130 small hydel projects and its proposal to come out with a comprehensive micro hydel power policy

Small Hydro in India: Environment Friendly Alternative Energy Source
B. S. K. Naidu; TERI Information Monitor on Environmental Science 1(2) (Size: 250.7 KB)
Paper highlights the benefits of small hydro, accounting for its potential in hilly and plain regions of India.

Low-Cost Watermill Upgrades for Income Generation: Final Report DFID; January 2002 (Size: 1.4 MB)
Report of project to optimize and transfer low-cost micro-hydro technology to maximise income-generation and to build technical capacity from traditional watermill sites in India

Micro Hydro Quality Standards
Alternate Hydro Energy Centre (AHEC), IIT, Roorkee; September 2005 (Size: 1.4 MB)

Accounts quality standards for Micro Hydro Systems which incorporate information from National and International Standards as well as quality standards of Sri Lanka and Nepal

Recommended Training Courses

From Ramya Gopalan, Research Associate

Performance Testing and Evaluation of SHP Stations
National Short Term Training Course, 9-14 January 2007, AHEC, IIT Roorkee (Size: 166 KB)
Aims at providing a platform for interaction between the beneficiaries and the experts involved in Performance testing of all new as well as old, small hydropower (shp) stations

Small Hydropower: Assessment and Development
30 January-10 February 2007; AHEC, IIT Roorkee (Size: 161.8 KB)
International training course aims to provide participants insight to SHP, site selection potential assessment, planning and design of civil works, selection of E&M equipment

Recommended Upcoming Event

From Ramya Gopalan, Research Associate

Hydro Srilanka- International Conference on Small Hydropower
22-25 October 2007; Kandy, Sri Lanka
Closing Date 1 February 2007

Call for Papers: (Size: 387 KB)
Covers technical, operational and environmental aspects, policy issues, hydro developments and investor interests in the field aimed at gaining new knowledge

Responses in Full

Vinod Kumar, Maithri, Palakkad, Kerala

This is an interesting idea. We have the experience of installing several very small hydro projects (from .5 to 50 KW) in the high ranges of Kerala during the last eight years. Most of them are using the ordinary pumps-carefully selected and modified-coupled to single phase AC generators or running the conventional induction motor as generator depending on power demands. The electro mechanical unit may cost 10000/Kw including the valves. All of the components are off the shelf. The power generated can be transmitted to an area of 1 km radius easily. The more remote an area the simpler should be the system.

After installation, the concerned communities are running the schemes. In some cases the entire capital cost is met by the local community or an entrepreneur or a bank loan or the local self-government or the combination of the four. If you are converting the existing water mills, the same civil structure-weir, pipes etc. can be used.

If you can identify interested communities, representatives of them can be trained on site selection, survey, installation and maintenance in a period of three to four days in a hands on mode. Such interventions by us in 1998-99 triggered several such schemes in remote parts of the state and made the role of agencies redundant.

We can offer you support to prepare manuals, formats for reports, training materials etc. if needed.

Ramesha C. Gowda, Karnataka State Pollution Control Board, Bangalore

Carbon trading provides an excellent opportunity for mini hydel power plants to be funded by donor agencies. However, one must ensure that people who are involved have a genuine interest in the project.  Otherwise, after installing the power plant, it will not be operated properly, as the people installing it would have already got back their investment through the funding agency.

Prabhjot Sodhi, UNDP GEF SGP, New Delhi

1. I think this is an excellent idea, but needs to be carefully seen with the following concerns:

  • Planning of the livelihood options that will be taken up needs to be clearly agreed with and among the community through village meetings. In one of UNDP GEF SGP’s pilot projects, the detailed options for livelihood benefits were not explored and agreed with village communities at the beginning, resulting in many conflicts. Later, with the collaborating NGO, all parameters were explained, defined and details agreed in village meetings, which really laid the basis for the sustainability of the program.
  • The institutional process is of crucial importance in projects of this kind. Thus, if you are working through SHGs, put in place a federation of the SHGs of different villages which may be informal and not necessarily registered. The institution is then made responsible to take up the management and operation. Clear roles and responsibilities are agreed upon, with clear rules for access and distribution of benefits.
  • The rules and regulations need to be agreed to in community meetings. This process approach does not necessary mean that all actions are agreed in “one meeting” – in fact, it needs to be facilitated as a natural and evolving process and the communities should not be led into the decisions, but should be given both the time and space for decision-making and sharing of responsibilities. This decentralized process is vital for developing local ownerships. We need to ensure that the major decisions are taken by the community, and not by us. We need to avoid driving by “fund spending” and a quick-fixing approach.

2. We give below the following documents:

a. Details of a project supported by UNDP GEF SGP in Tehri Garhwal, Uttaranchal. (Size: 1.10 MB)

Our consultant (Mr Yogeshwar - (M) 09818566036) has considerable experience in similar ideas and may be contacted for further discussions.  His address is given in above document.

b. Details of the UNDP GEF Small Grants Programme. 656 KB)

Anil Arora, UNDP, New Delhi

Under the UNDP/GEF project on Development of Small Hilly Hydel that was concluded in 2003, as one of its components, one power-generation water mill was put up at Neergarh in Uttaranchal.  Followed by this, Alternate Hydro Energy Centre (AHEC), IIT, Roorkee, had upgraded some more water mills for power generation in other States as a part of a programme of the Ministry of Non-Conventional Energy

Sources (MNES).  The watermill at Neergarh was put up by a private entrepreneur whereas, I am sure, water-mills in other States might be community managed.  More information on the manufacturers and the livelihood activities taken up as a result of such water mills may be obtained from Dr. Arun Kumar of AHEC. 

On the funding, you may like to check with Dr. Arun Kumar (AHEC) and Dr. Praveen Saxena (MNES) on the subsidies available from MNES, if any.  

If your proposal is innovative with large replicable impacts in neighbouring areas and if the beneficiaries can generate co-funding, you may like to discuss the proposal with Mr. P.S. Sodhi, National Coordinator, GEF Small Grants Programme. 

Shirish Sinha, New Delhi

Watermills have been traditionally used in the Himalayan region for mechanical purposes especially grinding and other processing. Almost ten years back we had conducted a detailed study on identification of water mills in the Himalayan states of India covering from J&K to Arunachal under the UNDP GEF Hilly Hydro Project, which has also been mentioned by Anil Arora. This study was done by TERI and the report should be available with them.

Under the same project we also had a technology upgradation component under which watermills were identified and upgraded for mechanical purpose only. We were engaged in putting up 50 such projects in Arunachal Pradesh, where existing watermills were upgraded. Technology upgradation included a few basic steps such as improving the water flow and direction of water flow on the runners. Since most of the traditional watermills had wooden runners, they were replaced by metal runners. We also made some changes in the grinding stones. The watermills which we upgraded were mostly owned by individuals and they provided energy services to local people. Benefits were clearly visible due to a distinct reduction in time required for processing grain. However, since the demand for such services were localized and other services were not added, the overall impact, in my view, was limited.

Uttaranchal has several watermill based projects. HESCO has done some work on community owned approaches. However, the best person to contact for this will be Arun Kumar, Head AHEC, IIT Roorkee. AHEC is also one of the nodal agencies for knowledge dissemination on decentralised power generation in Uttaranchal. Also, in Saharanpur there are technology suppliers. With regard to training and capacity building, I feel that there is sufficient local knowledge which exists within village communities and the external training required is minimal.

Similarly there is a significant documented experience on watermills in Nepal, which you may like to consult.

I also feel that if the ultimate purpose is to provide livelihoods through enterprise development, such projects will struggle as a community owned projects. They should either be owned by individuals who run different enterprises or by an organization (such as an NGO) which runs and manages such projects. The moment you attempt a community owned model, too many other complex issues of ownership, control and regulations will come in play.

MNES provides a subsidy for promotion of watermills, details of which are enclosed in the following document:  (Size: 24KB)

However, these schemes are reviewed periodically, so you must contact Uttaranchal Renewable Energy Development Agency (UREDA) as well as MNES for updated information on subsidies.

R. Sreedhar, Environics Trust, New Delhi

I give below my response on the points raised by Kandpal.

1. Experiences and precautions from other states in implementing and institutionalizing decentralized energy based livelihood promotion projects.

The first issue is that stand-alone micro-hydels are simple not viable.  The reason is simple. If we take a 5 KW unit, the total power generated in a day assuming 20 hours of operation is 100KWH.  If sold as power to consumers even at Rs. 2/unit it will fetch a “princely” amount of Rs. 6,000 a month, which makes it unviable to operate given that one needs constant attention on all aspects. The reality is that any unit has to have all the operations that a large electricity supply systems will have - production (ensuring the right quantum of flows; machine maintenance); distribution (load management is critical) and supply and recovery of costs (sometimes a problem if users are not united or services are not
satisfactory). The use of it as a captive source for value-addition depends upon the actual resources in the specific valley or site, since any transportation of resources from these areas is going to make it unviable.  The solution to this problem is to evolve a clutch of such microhydels in the valley, thereby reducing overhead costs of technically trained staff and look at value addition is a larger scale than what can be achieved with a single pico-hydel.

2. Advice on kinds of small enterprises, which can be set up using power generated and where these machines are available.

There are definitely possibilities.  A good additional venture could be on preprocessing of medicinal plants. Packaging itself could be an important activity.  In fact, we explored the potential of iodizing salt and packaging it locally in Uttaranchal - as many of us are aware that the region is goitre prone and the iodine losses are huge when salt is produced in Gujarat and becomes available to people in Uttaranchal only after 60 to 90 days. There are several other possibilities including bottling of special quality drinking water, etc.

3. Manufacturers of machines for food processing (flour mill, etc.), fruit processing (driers, juicers, peelers, pulpers, etc.), oil expellers, and distillation units known to members.

I would advise getting in touch with Bharat Bishtji of INHERE who has set up a unit not very far away from your location and has made huge advances in fruit processing.  In addition, CTD in Sahaspur has good knowledge on these.

4. Funding sources i.e. government agencies, donors, foundations who may be interested in supporting such a project.

This is something I find several agencies mention as priority but we ourselves have been largely unsuccessful in getting funding commitments.  Most funding agencies are not willing to invest on local institutional and capacity building, which is critical. Unless someone were to look beyond isolated projects and think of systemically addressing this energy-value add linkage, there seems to be very little possible. Over the past two decades, there has been a lot of talk about it and except for isolated units that were set up and failed or at best, it is a struggle (JSS and Beharilalji's Experience). As of today, I would not advice any organization to look at one single unit of pico-hydel.  At least a clutch of such units in a valley with atleast 500 KW may be necessary to make them viable and I feel it is better to wait until the day when donors too are on the same page.

Monali Ranade, UNDP, New Delhi

My responses refer to your query on watermill-based energy for enterprise development.

1. Experiences and precautions from other states in implementing and institutionalizing decentralised energy based promotion projects.

In any community owned enterprise, engaging and sustaining the interest of the rural community is by far the toughest challenge. This requires reaching a common understanding on needs; resource availability; energy utilisation, management and payment for services. This discussion should be initiated right at the beginning and the benefit spelt out very clearly - everyone likes to earn a profit! It is also very important to ensure that no extravagant promises or plans are made and that all stakeholders understand the economic value as well as their duties, towards payments and proper usage. Complete transparency in all financial matters is crucial.

2.  Advice on kinds of small enterprises which can be set up using power generated and where these machines are available.

Depending on the local resources available and the energy generation potential, enterprises are broadly of 2-3 kinds.
a. Local use – small flour mill, dal mill, oil extraction units (if possible, these can be clubbed with lighting of streetlights/schools/PHC, etc – and can be a good source of revenue as most Gram Panchayats have budget provisions for lighting application)

b. Market focused – primary processing (as you have given below) or advanced preparation (ready-for-sale, bottled/packed). Typically, ready-for-sale products have greater profit-margins but require development of special skills.

3. Manufacturers of machines for food processing (flour mill, etc.), fruit processing (driers, juicers, peelers, pulpers, etc.), oil expellers, and distillation units known to members

The following link has some good information. This site of the Ministry of Food Processing Industries is dynamic and you can send additional information for inclusion:

Similar information is also available on directory listings such as ‘’. The best way is competitive bidding and using a lifecycle cost approach (i.e., conversion efficiency, etc) in evaluation of bids rather than a lowest price approach. A lot of information, including funding opportunities, is also available on other websites such as

4. Funding sources i.e. government agencies, donors, foundations who may be interested in supporting such a project.

For watermills, MNES has made specific provisions. For the enterprise, most banks and lending institutions have special schemes. Some information is available on MOFPI website given above. I would also suggest that you prepare a detailed economic analysis to achieve profitability. This would help in raising funds as well as ensure sustainability.

I hope you find this useful. Please feel free to contact us for any further details or information.

Bashu Aryal, Western Uplands Poverty Alleviation Project, Kathmandu, Nepal

Good to see that you are discussing upgradation of watermills in Uttaranchal. Nepal has a lot of experience on this, and I give below a link to a UNDP project in Nepal working on this

Jyotsna Bapat, Senior Consultant, New Delhi

I have worked on case studies in rural infrastructure for alternate power production and distribution. I would like to share two case studies where, because of GEF funds, two water mills were put in place in Uttaranchal with the help of Roorkee engineering college. One of it was functional and produced enough power to feed 75 households in that remote hilly area. However, since no investment was made in setting up a distribution system, this could not happen. The outcome was that the watermill owner, who used to run a flourmill, now expanded it to run a small restaurant. He runs two fridges, fans, and lights in it and has expanded his business to cater to the tourists on their way to Nainital. So while he did
benefit tremendously due to the production of electricity, the rest of the settlement – including his own house - did not have electricity.

Therefore, I wish to point out that without a comprehensive plan for distribution, just producing electricity successfully using water mills is half the battle won.

Rahul Banerjee, Aarohini Trust, Indore

So far the discussion has revolved round micro-hydel plants in very steep hilly areas like Uttaranchal and the Westerns Ghats in Kerala. I would like to relate here the experience of a micro-hydel in a not so steeply hilly area. The Narmada Bachao Andolan, the people's organization engaged in the struggle against big dams, in collaboration with People's Energy Group - an organization with experience in executing micro-hydel projects in Kerala - set up a micro hydel on the Udai river in Satpura hill ranges in
January 2003. The area borders the Narmada river and is located in Maharashtra. The plant capacity was 15 KW  and since the head available was low (9 metres), a larger quantity of discharge of water was required. For this, a 70 m long weir had to be constructed on the river with a 9m head to the turbine. The important thing was that this long weir was constructed by 2000 person days of shramdan from the adivasi people of the hitherto unelectrified Bilgaon village, who were to benefit from the electricity. The details can be accessed at the following links –

Adivasi Village of Narmada Valley Achieves Energy Self-Sufficiency; Bilgaon Electrifies itself with 15 KW Micro-Hydel Project;

Current of Patriotism: Thousand Points of light in Bilgaon
The first problem faced by the project was the distribution of the electricity over the widely spread habitation in the hills. Distribution is the monopoly of the Maharashtra electricity board and it did not have any poles there obviously. Neither would it give permission to the NBA to do its own distribution Indeed the water resources department too did not give permission to build the weir over the river Udai.

Nevertheless the NBA went ahead and built the weir and powerhouse and distributed the electricity with cables and bamboo poles. However, this has meant a high T&D loss and various glitches with maintenance of the cables and poles.

This year there has been a more serious problem. The Udai is a big river with a very big hilly catchments that is mostly denuded and so it gets a big load of silt and rubble along with the water during the monsoons. The heavy rains this year brought on a massive flow of water and rubble and this led to the turbine getting damaged. The last I heard about a month back was that the hydel unit in Bilgaon was not working.

The point I am making here is that micro hydels of a slightly larger capacity and in non-conventional areas which are not the targeted areas for such activity need strong institutional support for both implementation and maintenance. People’s organizations and NGOs can help in the facilitation of the project but unless the government provides pro-active support to these initiatives through technical and financial assistance, it is very difficult to maintain their operation over a long time.

Pankaj Kumar S., UNDP, New Delhi

I agree with Monali – the most important sustainability issues in watermills, as in other rural technologies, are ensuring community ownership and capacity building.

I had the good fortune to lead a team from Society for Promotion of Wastelands Development that implemented a 50 Kilowatt community-owned microhydel at Malari village in Chamoli, Uttaranchal. Our efforts at involving community at all stages of the project showed the wonders one can achieve. The cost of the plant we implemented was 1/5 th  the cost of the Government, implemented in 3 months by us as against 2 to 3 years by the government, including capacity building and with full ownership of the community. The team’s efforts has made Malari one of the few (probably the only) community-owned microhydel that has been running for 5 years now in Uttaranchal without any external support. For
further details and a list of some enterprises that are possible in your location, Kandpalji, please see link below: (Size: 183 KB)

A do-it-yourself manual on social mobilization and technical implementation of community-owned microhydels is available in Hindi, which I can make available to the interested.

So what are the major learnings from Malari and other community-owned hydropower experiments?

1. The choice of the technology for power generation is definitely something that fosters or inhibits community’s ability to sustainably maintain the hydropower unit. Thus the tendency among implementing agencies for costlier and more “advanced” technology (for obvious covert reasons) is probably the most important reason for lack of scaling up of hydropower technologies.

Lesson 1 – Keep the technology so simple that local communities can repair and maintain them forever. A few percentage points loss in turbine efficiency is okay, if we can achieve

2. The lack of dialogue between those who work on livelihoods and those who work on renewable energy is appalling. State agencies that are implementing renewable energy projects – are only bothered about producing electrical power. They have neither the skills nor the long-term vision to ask a very simple question – what will this power that will be produced be used for ? The result is a string of power plants producing power in locations where nobody wants or can use this power, juxtaposed with many villages
with no access to desperately needed power.

Lesson 2 – Produce power where it is needed. To find out what the power produced will be used for, do an economic pre-feasibility of local products available which can be value added and a proper value chain analysis of such products. Only then, calculate the power required and go for producing power.

3. Government and donor financing agencies are also guilty of looking at hydropower plants in a sectoral manner, and fail to take an integrated perspective needed to initiate livelihood activities. Thus agencies that fund the power equipment will not fund for oil expelling machines and so on.

Lesson 3 – Donors/ government programmes must fund not only power producing equipment but all complementary machines as well as the various inputs needed to take the
product/s from producer to the market.

Many thanks to all who contributed to this query!

If you have further information to share on this topic, please send it to Solution Exchange for WES-Net at with the subject heading “Re: [se-wes] Query: Watermill Based Energy for EnterpriseDevelopment, from SIMAR, Uttaranchal (Experiences). Additional Reply.”

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