Micro hydropower to generate electricity in Nepal started with Pharping plant with an installed capacity of 500 kW in 1911 followed by Sundarijal and Panauti, in 1936 and 1965 respectively.
Up to 1980, the focus was laid primarily on large-scale power generation through large hydro and thermal means, the micro-hydro potential remained untapped.
[2] Micro hydro plants were installed in Nepal since the 1960s with locally developed turbines to replace diesel engines mainly for agro-processing.
Agriculture Development Bank of Nepal started to provide loan facility to village entrepreneurs to set paddy mill, oil expeller or grinder.
By the 1980s, a number of turbine mills were fitted with small dynamo to generate electricity to power few nearby houses.
In 2015, the Nepal Electricity Authority and the Alternative Energy Promotion Center agreed to grid interconnection.
Syaurebhumi MHP (23 kW) was the first project to interconnect with the national grid on 11 January 2018 delivering 178,245 units of electricity annually.
It also developed Pico Power Pack, a single shaft pelton wheel to run a grinder in collaboration with Nottingham Trent University, UK.