Project Details (Funding)


The total budget of the project is Rs.40.06 crores. The project is funded by Global Environment Facility (GEF) through United Nations Development Programme (UNDP), India Canada Environment Facility (ICEF), Government of India and Government of Karnataka. The sustainability issue beyond the GEF funding phase will be addressed through involvement of private sector, entrepreneurs and NGOs in the operation, maintenance and management of bioenergy systems.

The contribution of various funding agencies is as follows: 

Agency Budget % Share
( US $ Million) (Rs. Crores)
GEF -UNDP 4.02 18.81 46.6
ICEF ​2.49 11.49 28.9
GOK 1.48 6.84 17.2
GOI 0.39 1.81 4.5
Others 0.24 1.11 2.8
Total 8.62 40.06 100.0​

Project Period
The project was signed on 8th May, 2001. The project period extends upto December 2010. 

Project Strategy
The project aims at overcoming technical, financial, institutional, information and market barriers to promotion of biomass energy. The project would provide integrated services through decentralised generation and distribution of electricity for catering to various end uses in village areas. This will be done through

  • Production of electricity through biomass based gasifier systems for providing electricity for home lighting, pumping of drinking water, irrigation of dry lands and running of small rural industries.
  • Production of biogas from cow dung and leaf litter for providing cooking gas to all the households.

The project would develop and promote "marketing of end-use service package" such as irrigation facilities along with improved agricultural technology package coupled with development of skills of endusers, to increase the household incomes. This would enhance the paying capacity of the rural households. The cost recovery models and mechanisms that would be developed by the project would offset investment risks perceived by the private sector, leading to financial sustainability and replication of the bio-energy packages developed by the project.

Project Components
The key strategic components of the project are:

Technology Package Standardization

  • Development and adoption of low-cost producer gas engines for use in conjunction with biomass gasifiers.
  • Development of detailed standards and technical specifications for bioenergy technologies for wider application.
  • Development of appropriate - sized community bio-gas plants based on cow-dung and leaf litter as raw material.

Bio-energy System demonstration

  • Identification and entrepreneurship development of local enterprises for installing and operating the bio-energy packages.
  • Project will demonstrate technical soundness of higher capacity i.e., 40, 100, 200 and upto 500 KW of gas engine based biomass gasifier systems in a phased manner.
  • Testing of "good quality energy services model" and fine-tuning of "fee for service" approach
  • Development of sustainable biomass production and management models

Capacity building to overcome institutional barriers

  • Bioenergy packages for replication in rural India.
  • Development of training modules
    • Focussing on technical operations of the bio-energy systems to target potential technicians for operating and maintaining the systems
    • Focussing on business skills i.e., marketing, finance, accounting, billing and project development targeting NGOs, Community Based Organisations and Entrepreneurs.
  • Training for entrepreneurs, NGOs, managers, women in planning, management of bioenergy systems, business skills for the success of rural bioenergy development institutions
  • Infrastructure development for manufacturing

Enabling activities to address market barriers

  • To formulate approach for "fee-for-service" leading to policy framework to create level playing field for bio-energy in rural energy service provision.
  • Documentation and dissemination of successful policy interventions, lessons and experiences.

Information dissemination

  • Setting up information system on bioenergy technologies, standards, manufacturers, financial mechanisms and experts
  • Packaging of information to meet the requirements of different categories of stakeholders (users, service providers, manufacturers, etc.).
  • Developing promotional modules - audio-visual, print and other media

Removal of financial barriers

  • Developing a funding mechanism to provide venture capital.
  • Demonstration of economic and financial viability through creation of recovery mechanisms
  • Linkages to be established with micro-credit organisations, NGOs and other village level groups for enabling cost recovery.
  • Demonstration of willingness and capacity of rural households to pay for good quality energy services

The project would also develop financial and management systems for the post-project period by exploring options such as 'Commercial Bank-Entrepreneur System' and 'Panchayat - Entrepreneurs/NGO' models.