This could also significantly reduce the country’s annual import of Rs33 billion worth of LPG from India which grew four-fold in the past 10 years, making up 2.5% of Nepal’s total import bill. But to scale up, industrial biogas needs the same government incentives as hydro, solar and wind power.
At the moment hydropower investors enjoy a 100% corporate tax holiday for 10 years, and 50% for the next five years. There is only 1% tax on imports of equipment for solar, wind and hydropower, there is no such provision for the equipment for industrial scale biogas. Instead, there is a tax on interest, and also VAT on bio-CNG.
“The government should look at this not only as an energy project, but at its multifaceted benefits,” says Kushal Gurung of Gandaki Urja. “There is a waste-to-energy and fertiliser angle, too. If we want to make Nepal fully organic in the next ten years, projects like these need to be prioritised.”
Gandaki Urja got a boost from an unlikely source, Business Oxygen (BO2) in Kathmandu which helps entrepreneurs running Small and Medium Enterprises (SMEs) to scale up by injecting equity and providing technical assistance.
Putting wind in the map, Kushal Gurung
Climate risk to hydropower investment, Ajaya Dixit
Says Siddhant Pandey of BO2: “We are always on the lookout for climate investments, and we realised that bio-CNG would be an incredible adaptive resilience investment. It would displace imports of LPG and fertiliser. It was going to be clean, no carbon footprint, and it made business sense because it met our internal return on investment expectation.”
The challenges are ensuring reliable sources of raw material and building knowhow for the technology within Nepal.
Says Pandey: “The Pokhara plant is a drop in the ocean, it can abe replicated in all 7 provinces. We know it is scalable, and it depends how proactive provincial governments will be.”