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that more farmers could afford the installation of biogas plants. In 1990, it was realised that major
cost reduction was not possible through R & D without affecting the life span and the reliability
of the biogas plants. It was recommended to investigate possibilities of making biogas cheaper
through financial measures, i.e. subsidy.
The long term objectives of BSP were to reduce the rate of deforestation and environmental
deterioration by providing biogas as the substitution of fuel-wood and dung cakes to meet the
energy demand of rural population, to improve the condition of health and sanitation situation of
the rural population, particularly women by the elimination of the smoke produced during cooking
in the firewood, by reducing the hardships and time consumed in the collection of firewood and by
stimulation of better management with regard to dung and night soil, and to increase the agriculture
production by the optimal use of digested dung as organic fertilizer.
The involvement of BSP was divided into two phases. The first phase was from July, 1992 to
July, 1994 and laid down the objectives to construct 7,000 biogas plants, to make it more
attractive to small farmers and farmers of the hills and formulate recommendations on the
privatisation of biogas sector in Nepal. The major implementing agencies were SNV/N/BSP,
Gobar Gas Company (GGC). The first two objectives were met by providing flat subsidy rate of
Rs. 7,000 in the Terai and Rs. 10,000 in the hills and the additional subsidy amount of Rs. 3,000
was provided in hill districts taking into consideration the higher transportation cost. In case of
cash plant, the subsidy was channeled through the construction company. The loan plants were
provided finance by the banks.
The mid term evaluation undertaken in April and May 1994 concluded that the program was
progressing faster than anticipated. It had succeeded in establishing the basic framework for the
sound development of the biogas sector in Nepal. On the basis of the recommendations of the
evaluation, the II Phase was designed, covering a period of 3 years from July, 1994 to July,
1997. The major objectives were to construct 13,000 biogas plants, to make it more attractive to
small farmers and farmers of the hills and support the establishment of an apex
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