Financial and Technical Assistance for the Pakistan Domestic Biogas Programme Wholesale Credit Facility

The PDBP is a project of the RSPN, a non-profit company that is a network of ten local RSPs located throughout Pakistan. The ultimate goal of PDBP is to develop a commercially viable domestic biogas sector in Pakistan. The programme began in 2009, and by the end of its first year 100 biogas units had successfully been constructed. In 2010 an additional 590 plants were completed. Over the next four years the programme aims to construct an additional 14,000 units in Punjab. Over ten years the programme aims for 300,000 plants. An integral part of this scale up is the addition of end-user finance which the program believes will greatly increase both demand and product penetration.

A large portion of end-user finance can be furnished through progressive MFIs that are willing to expand their portfolio with low cost, long-term loans to facilitate PDBP’s goals. The total cost to fund this facility over four years may be about $2.75 million with about half of this initial outlay funded by social investors and half by donors. Depending on the exact structure of the facility assumed.

The objective of this technical assistance is to describe a wholesale credit facility that increases access to finance to further the goal of the PDBP to create a commercially viable domestic biogas sector development in Pakistan. The final report was commissioned by the PDBP to support the development of biogas lending in Pakistan. The Capstone team’s analysis focuses on the design of a credit facility to increase access to finance for biogas plant construction. The team’s recommended product is a BCF that would support lending for domestic biogas plants to increase end-user affordability.