Micro Hydro Functional Group (MHFG) prepares an Action Plan with the support of DDC: REDS. Implementation, operation and maintenance work are done according to the Action Plan.

Implementation:
MHFG is responsible for the implementation of the scheme and its operation and maintenance. DDC: REDS provides technical assistance and facilitates implementation.

Land Acquisition:
The community is solely responsible for acquiring land for canal, powerhouse and other civil structures, penstock, erection of poles etc. MHFG and the land owner/s sign a MoU to avoid future conflicts. The ownership has to be legally transferred to MHFG wherever possible.

Quotation Collection:
At least three quotations from pre-qualified and eligible manufacturers/ installers are called for the supply and installation of electro-mechanical parts. All quotations are analyzed and discussed. Selection of the best supplier/ installer is made by consensus. A contract is singed with the supplier.

Construction:
Community is responsible for the construction of all civil components like diversion, intake, headrace, canal, desilting, basin, forebay, penstock supports and anchor blocks, power house, tailrace canal and spillway overflow. Civil overseer/sub-overseer is hired to supervise the construction work. All local material and unskilled labor required for installation of electromechanical equipment and distribution system is provided by the community.

Test Operation:
It is mandatory to undertake test operation of Micro Hydro scheme. It is conducted in the presence of the representatives of MHFG, DDC, VDC, DDC: REDS, the bank representative, supplier/ installer and other stakeholders.

Audit
MHFG is responsible to carry out a ‘Public Audit’ of all income and expenses incurred during the construction of the scheme. All the members of the MHFG and representative of DDC: REDS and VDC are presented during the public audit. Decisions made in consensus are minute and singed by all.

A government certified auditor prepares a formal audit of CEF every year.

Project Completion Report:

MHFG prepares a Project Completion Report. The report contains actual resources mobilized and expenditure made a detail of civil works actually undertaken, a specification of electromechanical equipment installed, the actual cost of each component and the performance of the scheme during the one year warranty period.

Operation and Management:
MHFG is solely responsible for proper operation and management of the plant and the distribution network. It also prepares the rules and regulations pertaining to sales and consumption of electricity and also fixes electricity tariff rate.

Operator and manager for each MH scheme are appointed among the potential candidates recommended by COs. They commit publicly to undertake training and responsibilities to run the MH scheme.

The major responsibilities of a Manager:

1. Daily operation and management of MH scheme.
2. Supervision, monitoring and evaluation of Operator’s activities
3. Customer relations
4. Monthly revenue collection
5. Maintain and update accounts and books.
6. Loan repayment
7. Inform the consumers and MHFG about the MH scheme
8. End uses promotion

The major responsibilities of an Operator:

1. Daily operation
2. Maintain logbook
3. Regular maintenance
4. Ensure safety of equipment as well as customers.

Manager and Operator report to MHFG every month. The report includes the state of the scheme and difficulties, revenue collected and the names of the defaulters which are announced in the meeting. Manager presents an income and expenditure statement in the monthly mass meeting.

After successful operation of MH scheme for six months, the MHFG could be is converted into a Cooperative or registered under Company Act. All members of MHFG, DDC and VDC become shareholders. Their voting rights are based on their respective investments for installation of MH scheme.

Safety Measures:
Classes in all MH scheme site are organized by MHFG and DDC: REDS to aware and sensitize villagers, especially women and children on proper way of handling electrical appliances and wire. Classes are conducted based on a Safety Manual.

End Use Promotion:
The goal of REDP is to enhance rural livelihoods by using MH scheme as an entry point. Utilization of electricity is not only for lighting but also to operate electricity based micro enterprises.

REDP envisages ‘One House One Enterprise’ model and supports the prospective entrepreneurs in adapting technologies to local conditions and to establish the micro enterprises through MHFG. Soft loans or venture capital are provided for establishment and operation of electricity based micro enterprises. Each MHFG is provided one time support of Rs. 10,000 / kW but not exceeding NRs. 250,000 for the promotion and development of end uses.

MHFG screen a business proposal submited by interested entrepreneurs and selected ones are forwarded to DDC: REDS for verification and final approval. 50 percent of the total cost for the establishment of the enterprises is provided through CEF and the rest has to be borne by the entrepreneur.

If the concerned MHFG does not submit any proposal to DDC: REDS within six months after the commission of MH scheme, financial support allocated to it by DEF for end-use promotion could be void.