Nepal has signed an emission reductions purchase agreement (ERPA) for the Nepal Biogas project, which will benefit small rural communities throughout the country.

A press statement issued by World Bank country office in Nepal said, “This is the first greenhouse gas emission (GHG) reductions project in Nepal under the Clean Development Mechanism (CDM) of the Kyoto Protocol.”

“The project promotes the use of biogas as a commercially viable industry in Nepal by expanding its use for cooking and lighting in rural households. The biogas units will be sold at a non-commercial price to poor households and displace fuel sources traditionally used for cooking—fuel wood, kerosene and agricultural waste—with gas from the treatment of animal and human waste,” the statement adds.

Each household biogas unit can reduce almost five tons of carbon dioxide equivalent annually.

“This project is a major breakthrough,” the statement quoted Ken Ohashi, the World Bank Country Director for Nepal as saying.

“It is the result of years of painstaking work by visionary Nepalis who saw that clean environmental practices would eventually bring economic and social payoffs. Hundreds of thousands of rural Nepalis now stand to benefit not only from renewable energy sources for their homes and communities, but a wide range of associated benefits in the areas of health, sanitation and agriculture as well,” he added.

In Nepal, only 15 percent of the rural population has access to electricity. The dependence on fuel wood has contributed greatly to deforestation in the country. Switching to biogas will help lessen the pressure on forests.

“The project developer, Alternative Energy Promotion Centre, Nepal (AEPC) will sell a total of one million tons of greenhouse gas emission reductions to the World Bank managed Community Development Carbon Fund (CDCF),” the statement adds.

The statement also quoted Madan Bahadur Basnyat, Executive Director of AEPC, as saying, “The Nepal Biogas is the first CDM project in Nepal. We take pride in participating in the global efforts to reduce GHG through this project. The revenues from the carbon credit sale will help us expand biogas plant installations to provide affordable energy to more remote households of rural Nepal without depending much on donor assistance.”

It is expected that about 200,000 plants will be installed over 8 years.