Compressed Bio-Gas Development Project for Sustainable Alternative Towards Affordable Transportation

The project proposes an $810 million facility to overcome financial and technical barriers to compressed bio-gas (CBG) development in India. By providing a blend of ADB loans, GCF grants, and partial credit guarantees, the project aims to encourage participating financial institutions (PFIs) to lend to CBG developers. The initiative targets a reduction of 124 million tCO2eq over 10 years by replacing fossil-fuel-based compressed natural gas (CNG) and reducing crop residue burning. It includes a $10 million technical assistance component to build capacity in the CBG value chain, from feedstock collection to offtake.

• The project aims to mitigate climate change by avoiding an estimated 124 million tCO2eq of greenhouse gas emissions over a 10-year lifespan, averaging 12.4 million tons per year.
• India faces severe air pollution, particularly in New Delhi, where particulate matter emissions from crop residue burning are 17 times higher than all other sources combined, including vehicle emissions and industry.
• The project addresses India's high reliance on imported fuels, noting that imports account for 85% of crude oil, 75% of liquefied petroleum gas, and 50% of liquefied natural gas on a consumption basis.
• Financial barriers hindering CBG development include high production costs, a lack of clear value chain mechanisms for feedstock and offtake, and a high risk perception among local financial institutions, which often demand excessive collateral.
• The proposed 'SATAT facility' will be managed by the Oil Industry Development Board (OIDB) with the State Bank of India (SBI) as fund manager, utilizing $400 million in ADB and co-financier loans to be on-lent to participating financial institutions (PFIs).
• The GCF's contribution consists of a $70 million partial credit guarantee to reduce collateral requirements for developers, a $20 million grant for seed money, and a $10 million technical assistance grant.
• To mitigate offtake risk, public oil and gas companies—including IOCL, HPCL, BPCL, and GAIL—are mandated to purchase CBG at fixed prices through long-term commercial agreements, typically valid for 15 years.
• The initiative promotes a circular economy by using agricultural residues and municipal solid waste (MSW) as feedstock, while producing organic fertilizers as a byproduct to reduce chemical fertilizer use.
• The project includes a gender-inclusive approach to empower rural and urban poor women, specifically targeting those who work in agriculture (over 80% of rural women) and female waste pickers for roles in feedstock collection and segregation.

APA

Green Climate Fund (2023). Compressed Bio-Gas Development Project for Sustainable Alternative Towards Affordable Transportation. https://www.greenclimate.fund/sites/default/files/document/30090-compressed-bio-gas-development-project-sustainable-alternative-towards-affordable.pdf

Chicago

Green Climate Fund. Compressed Bio-Gas Development Project for Sustainable Alternative Towards Affordable Transportation. 2023. https://www.greenclimate.fund/sites/default/files/document/30090-compressed-bio-gas-development-project-sustainable-alternative-towards-affordable.pdf.

Wikipedia

{{cite report |author=Green Climate Fund |title=Compressed Bio-Gas Development Project for Sustainable Alternative Towards Affordable Transportation |date=25 September 2023 |url=https://www.greenclimate.fund/sites/default/files/document/30090-compressed-bio-gas-development-project-sustainable-alternative-towards-affordable.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greenclimatefund2023compressed, author = {{Green Climate Fund}}, title = {{Compressed Bio-Gas Development Project for Sustainable Alternative Towards Affordable Transportation}}, institution = {Green Climate Fund}, year = {2023}, month = sep, url = {https://www.greenclimate.fund/sites/default/files/document/30090-compressed-bio-gas-development-project-sustainable-alternative-towards-affordable.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }