The objective of this paper is to identify the most cost-effective areas for Demand Side Management (DSM) in Nepal. On-site interviews were undertaken with power utilities (the Nepal Electricity Authority or NEA and its sub-companies) and various electricity end-users in Nepal to collect data, as well as walk-through auditing at the end-users' premises. International standard financial and economic analysis methodologies were used to project cost-effectiveness assessments. This paper concludes that the majority of the potential DSM technologies in Nepal are financially viable and that the most cost-effective areas for DSM technologies in Nepal include power factor (cos (p) correction; energy-efficient lighting in the residential and commercial sectors; and the installation of intelligent motor controllers for industrial induction motors. (c) 2006 Elsevier Ltd. All rights reserved.