This paper examines the process of crafting institutions and socio-cultural changes triggered by [of] “community managed micro-hydro”. The micro-hydro development was started after the political changes of 1990 and with the establishment of alternative energy promotion center in 1996 in order to electrifying rural villages of Nepal. Since then, micro-hydro has been promoted in remote and isolated villages by the communities as a common property with support from government and non-government organization. Simultaneously, these villages have been experiencing social and cultural changes in daily life, as electricity links local people into the global cultural arena. This paper provides an insight into how micro-hydro as an external intervention contributes in the transformation of society and culture, intersecting with existing local institutions and socio-cultural characteristics (caste/ethnicity, gender, economic status and power relation) in diverse user groups.

Drawing upon ethnographic research in rural village of western Nepal, the author argues that community managed micro-hydro is a political process both in the project design and crafting local institutional arrangements. Through the different interests and ideologies between or among the local stakeholders, micro-hydro development is politicized in order to gain the power at the local level and control over the resources. By examining the existing social interfaces upon micro-hydro and building from insights from anthropology and development, this paper argues that social inequality and power relations have direct influences in the crafting of institutional arrangements and decision-making. Furthermore, the author argues that not all people in community are equally benefited from the community managed micro-hydro intervention. However, the local institutions which is under the direct influences of local elites further marginalizes and excludes the poor, women, and Dalits both from the right to use of electricity and potential developments.