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SNV Ethiopia signs carbon credit agreement for biogas digesters

On 14th April 2011, SNV in Ethiopia signed a three year agreement of Euro 1,275,000 with the Oromia Regional Bureau of Water, Mineral Energy/ Regional Biogas Coordination Office and the Oromia Credit and Saving Share Company, for credit financing of the biogas households in the National Biogas Programme.
Under this agreement, 6000 households, reaching 30,000 people, in Oromia regional state will each receive Euro 272 to access biogas technology. The loans attract interest of 15% and are payable in two instalments over a period of two harvest seasons. In view of Oromia Credit and Saving Share Company’s large and increasing network both inside and outside Ethiopia, their position as a biogas promotion partner is important. The loan product will catalyse access to the much required technology. The company’s ability to take a risk to invest in this long term arrangement is a pace setter and will hopefully inspire other MFIs (microfinance institutions) to develop similar products.

It is anticipated that within one month of signing the agreement of at least 700 households, predominantly female, will access finance to invest in a digester. Access to finance is one of the critical issues that determines a farmer’s decision to invest in biogas. Although the digesters are subsidized it is still a big investment. Households are also expected to make savings on fuels, and increased production through use of bioslurry. A loan facility is therefore very helpful.

The National Biogas Programme in Ethiopia aims to construct 14,000 digesters reaching 70,000 people in the country by 2013. In 2011, it is expected that 2,000 digesters will be constructed in the country. This programme is part of the Africa Biogas Partnership Programme financed by the Netherlands Government. The fund is managed by Hivos while SNV provides technical advice to the programme. ABPP aims to construct 70,000 biogas plants in Ethiopia, Kenya, Tanzania, Uganda, Senegal and Burkina Faso providing about half a million people access to a sustainable source of energy by the year 2013.

Additional information: SNV
News date: 14/04/2011

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