The global climate change mitigation policies and their stress on sustainable development have made electrification of rural mountainous villages, using small hydro, an attractive destination for potential clean development mechanism (CDM) projects. This invariably involves judging the additionality of such projects. The paper suggests a new approach to judge the additionality of such stand-alone small hydropower projects. This has been done by breaking up additionality into two components: external and local. The external additionality is project developer dependent. For determining the local additionality, the paper takes into account the probability of a village getting electrified over a period of time, which is kept equal to the possible crediting period. This is done by defining an electrification factor (EF) whose value depends on the degree of isolation, financial constraints and institutional constraints encountered while electrifying a mountainous village. Using this EF, the additionality of a CDM project can be judged in a much easier and accurate way. The paper is based on the data and inputs gathered during site visits to many isolated villages located in the eastern Indian Himalayas. (c) 2006 Elsevier Ltd. All rights reserved.