UN Division for Sustainable Development

Case Study Detail Record

Organization type:	Government

Name of Ministry/Agency:

Country:	United States of America

Initiative Title:	Microcredit for Farmers to Install Biogas Plants in Nepal

Internet links:	http://www.un.org/esa/sustdev/csd/casestudies/biogas_usa.pdf

Scope:	National: - Nepal

Status:	Ongoing

Timeframe:	Start: End:

Lead Institution:	US AID

Stakeholders/Partners:	Microcredit lenders Alternative Energy Promotion Center

Relevent issues:	- Innovative financing solutions and technology transfer

Objectives/Challenges:

1) To establish and strengthen financial institutions to encourage lending for biogas systems; and 2) To increase access to biogas

Policy Options:

Work with banks to increase the limit for microcredit per household.

Summary:

In order to make biogas more readily accessible, this program worked with the Nepal Rastra Bank (Central Bank) to increase the limit for microcredit per household from $435 to $725. In addition, the program works to ensure that biogas investments are eligible for microcredit at affordable interest rates and to facilitate loans through rural based microcredit lenders. Over 600 biogas plants have been constructed using microcredit, benefiting 3,000 people, mitigating 2,700 tons of carbon dioxide. Microfinance institutions have reported a near 100% repayment rate on loans. Key features of programme include: Simultaneously increasing energy access while mitigating carbon dioxide emissions. Results achieved and known impacts: Rules limiting microcredit maximum increased from $435 to $725. Over 600 biogas plants have been constructed using microcredit, benefiting 3,000 people, mitigating 2,700 tons of carbon dioxide. Leveraging of over $200,000 in total additional investments. Microfinance institutions have reported a near 100% repayment rate on loans. Sustainability, scalability, and transferability: The sustainability is evident by the fact that nearly all installed systems (97%) are currently operational; scalability has been demonstrated with nearly 110,000 systems installed country wide.