The provision of energy in rural households and communities has several implication and uses. The field experience drawn in this paper shows the efforts and approaches employed to make the optimum use of the electric energy through enterprise creation. If rural electrification is left to grow without any directional inputs, experience has shown that, beyond obvious use for lighting, radios and basic home-appliances, uses which might bring economic development to an area, are slow to emerge. To be of development benefit to an area, electricity should be employed in enterprises which employ local people, and add value to local resources. However, contrary to the conventional ideology, the empirical observation from this field experience in one of the hill districts of Nepal demonstrates the positive effect of a rural-electrification programme with various innovative approaches, practical tariff policies and varieties of motivational and entrepreneurship development mechanisms. These strategic approaches with supportive institutional mechanisms have proven conducive for fostering the growth of local enterprises, thus creating employment and resource harnessing. Complementary service mechanisms and policy coordination is a necessary precondition for an effective use of power in the rural community rather than the rhetoric policy of rural electrification in isolation. Electrification in isolation, without any promotional or supportive mechanisms, still creates pitfalls. (C) 2003 Elsevier Ltd. All rights reserved.