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[KATHMANDU] A project that is bringing clean, efficient energy to rural communities in Nepal received a major boost this month in the form of a deal that rewards it for reducing the country's greenhouse gas emissions.

The deal is Nepal's first under the Kyoto Protocol's Clean Development Mechanism, which allows industrialised nations to offset some of their emissions by investing in clean energy projects in developing nations.

The Nepal Biogas Project promotes the use of underground 'digesters' that use bacteria to generate methane gas from cattle dung (see Small is bountiful in Nepal's energy sector). Using methane instead of wood or kerosene to power stoves or lamps can reduce a household's greenhouse gas emissions by five tonnes a year.

Under an agreement signed on 3 May, the World Bank's Community Development Carbon Fund will pay Nepal to reduce its emissions by one million tonnes over the next seven years by increasing the use of biogas units.

Khagendra Nath Khanal, senior quality control officer of Biogas Sector Partnership Nepal, the nongovernmental organisation implementing the project, says the new deal will bring the project US$7 per tonne of avoided emissions.

The money will be used to build more digesters, which will be sold for no profit to poor households.

Since 1992, the project has constructed 145,000 biogas units. This has supplied energy for about 15 per cent of the nearly one million Nepalese households for which they are appropriate, says its executive director Sharad Rai. The project aims to install about 83,500 more units by 2009.

The project will bring additional benefits by attaching latrines to the biogas units to improve sanitation. Farmers will be able to use the residual material from the digesters as a fertiliser, and women and children will not have to collect firewood anymore.

"We are happy to become the first CDM project in Nepal to contribute to reducing global greenhouse gas emissions through the rural community," says Manjal Raj Manandhar, acting executive director of the Nepalese government's Alternative Energy Promotion Centre that developed the project.