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■ Price of NPK saved is based on prices of urea, DAP and MoP, i.e., NRs 16.09/kg of Nitrogen,
NRs 40.37/kg of Phosphorus, and NRs 15.58/kg of Potassium; 16
■ Plant nutrients present in the dung is assumed, following CODEX (1995: 10-11), to be N = 0.5%;
P = 0.25%; and K = 0.5%;
■ Savings from un-burning of dung and non-leaching of dung nutrients are taken as 9 percent and
50 percent, respectively; and
■ A flat subsidy of NRs 6,000 for all sizes of plants in Terai and some hilly municipalities, and
NRs 9,000 in hills has been taken into consideration.
12.5.2 Further Assumptions in Economic Analysis
■
■
■
The life of biogas plants taken as 10 years and 20 years;
Saving in kerosene has been adjusted by adding the subsidy amount of NRs 3.20 on the ongoing NRs
10.50 per liter, i.e. NRs 13.70 per liter;
Price of NPK saved is based on prices of urea, DAP and MoP and 27 percent subsidy in urea, i.e.,
NRs 22.02/kg of Nitrogen, NRs 40.37/kg of Phosphorus, and NRs 15.58/kg of Potassium;
■ Conversion of firewood saved into forest area can be done, if we intend to do so, at the rate of 32.7
metric tons of firewood harvest per hectare per annum (IUCN, 1995: Annex 10); and
■
NRs 1,100 (guarantee charge of NRs 600 and promotion fee of NRs 500) are deducted from the
aggregate financial investment costs while calculating the aggregate economic investment cost of the
BSP installed biogas plants.
Two separate sets of analyses arc carried out with these assumptions; (i) EIRR and FIRR with NRs 1,000
across the board reduction on the ongoing subsidy rates, and (ii) EIRR and FIRR with different subsidy rates
for a typical 8 cubic meter plant. The analyses are separately conducted for Terai and Hills. Remote Hills are
not included in the analysis because the price quotation for the construction of biogas plants is not available
for that region. The biogas company owners say that only the transportation cost is higher for the remote
hills, while other costs of the plant installations are the same as for the hills.
12.5.3 Values of Internal Rates of Return (IRRs)
The geographical division of the country is taken as classified by BSP and followed by Nepal Biogas
Promotion Group (NBPG) in its quotation of the costs for the construction of biogas plants for the fiscal year
2055/56 (BS). NBPG has quoted the construction costs for the Terai and hills. It did not have any price
quotations for the remote hills.
Three scenarios have been presented in this paper. The first scenario is the one with no subsidy and no
consideration of the increased nutrients (NPK) in the biogas slurry. The second scenario is the one where the
proposed new subsidy rates (NRs 9,000 for hills and NRs 6,000 for the Terai) are incorporated, but with the
exclusion of incorporating increased nutrients in the slurry, The third scenario is the one where the proposed
subsidy rates as meniioned in [he second case have been incorporated along with the inclusion of increased
nutrients. All these scenarios have been presented for both the hills and the Terai.
The summaries of the financial internal rates of return for hill and the Terai under different scenarios are
presented in Table 12.1 and Table 12.2.
16 The prices of chemical fertilizers are taken as quoted by Agricultural Inputs Corporation (A1C). The quoted
prices are as follows: Urea (containing 46 percent Nitrogen) NRs 7,400 plus a subsidy of NRs 2,728/mt; DAP
(containing 18 percent Nitrogen and 46 percent Phosphorus) NRs 18,570/mt; MoP (containing 60 percent
Potash) NRs 9,350/mt; and Ammonium Sulphate (containing 21 percent Nitrogen) NRs 6,900/mt.
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