National Biogas Programme, Ethiopia

Biogas for Better Life

Brief Programme Profile

December 2007
 Brief Programme Profile / National Biogas programme Ethiopia

Published by:

Ethiopia Rural Energy Development and Promotion Centre (EREDPC)

P.O. Box 8063
Addis Ababa
Ethiopia
T 251 (0) 11 5153689
E [email protected]

and

SNV/Ethiopia
P.O. Box 40675
Addis Ababa
Ethiopia
T 251 (0)11 4654386/7/9
F 251 (0)11 4654388
E [email protected]
W www.snvworld.org

Name of sector:
Domestic Biogas

Contributed by:
Dr. Getachew Esthete, SNV
Camilla de Stoop, Consultant

Addis Ababa, December 2007

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 Brief Programme Profile / National Biogas programme Ethiopia

1. Programme Title
National Biogas Programme Ethiopia

2. Background and Justification

Access to modern energy is a key element in rural development. However, despite all
attention given to energy issues in Ethiopia in the past, rural communities continue to be
deprived of basic energy services. Modern forms of energy are simply not available in
rural areas while traditional sources are rapidly being depleted, thereby deepening the
rural energy crisis.

Woody biomass represents the principal form of cooking and lighting fuel in Ethiopia’s
rural areas. An increasing fraction of the population is being confronted with the difficult
choice between eating its food poorly cooked and travelling long distances to collect fuel
for cooking. The scarcity of fuel wood has led to an increased utilization of dung and
agri-residues for cooking, which could otherwise have been used to enhance the nutrient
status and texture of the soil and contribute positively to agricultural production.
Biogas offers an attractive option to replace unsustainable utilization of wood and
charcoal. It complies with the principles put forward in the country’s Energy Policy and
Environmental Protection Strategy, and closely meets the terms of the Plan for
Accelerated and Sustained Development to End Poverty (PASDEP) as well: it is a local,
renewable resource that addresses the basic needs of rural households amongst which
energy; it supports decentralised access to household energy; its by-product – bio-slurry –
enhances agricultural productivity and promotes organic farming, thus offering
opportunities for niche markets and export. On the whole, it ensures environmental
sustainability and its use as domestic fuel improves development conditions and
opportunities for women and girls. Last but not least, it lends itself to commercial
development, hence contributing to the development of the private sector and the
technical and human capacity of the Technical Vocational Education and Training
Centres (TVETs).

Biogas technology was introduced in Ethiopia as early as 1979. In the last two and a half
decades, around 1000 biogas plants were constructed in various parts of the country.
Presently, approximately 40 % of these plants are not operational due to a lack of
effective management and follow-up, technical problems, loss of interest, reduced animal
holdings, evacuation of ownership and water problems. Other reasons for the limited
success of the technology in Ethiopia include the adoption of a project-based stand-alone
approach without follow-up structure in place, variations in design, and the absence of a
standardized biogas technology.

Due to the renewed interest in biogas, and in order to unleash the potential for this bio-
fuel in Ethiopia, a feasibility study was commissioned to assess the prospects for
domestic biogas in the country. This study led to a formal partnership between the
Ethiopian Rural Energy Promotion and Development Centre (EREDPC) and

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 Brief Programme Profile / National Biogas programme Ethiopia

SNV/Ethiopia, and in 2007 a joint EREDPC/SNV team was established to develop a

programme implementation document. An extensive stakeholders’ consultation process
at both regional and national level resulted in more than 120 representatives of the
government, non-governmental organisations, and the private and financial sectors
gaining awareness about the features and functions required for a national biogas
programme (NBP), and providing ample inputs for the development of the programme.

The NBP envisages a first – pilot – implementation phase with construction of 14,000
biogas plants in four regions and development of a commercially viable biogas sector in
the country. The lessons learnt from this phase will be used to design strategies for up-
scaling the construction of biogas plants covering more areas.

The development of a biogas sector requires a number of functions to be implemented.

These functions will be executed by multiple stakeholders, each of whom will take on
responsibilities best suited to its objectives and in agreement with the other programme
stakeholders. The Ethiopian Rural Energy Development Centre (EREDPC) at the
national level and the Mines and Energy Agencies (MEAs)/Energy Departments at
regional level will be the lead institutions. A National Biogas Programme Coordination
Office (NBPCO) and regional Biogas Programme Coordination Offices (RBPCO) will be
established to ensure the operational management of the programme.

3. Objectives of the Programme

The overall goal of the NBP is to improve the livelihood and quality of life of rural
households in Ethiopia through the exploitation of market and non-market benefits of
domestic biogas such as replacement of unsustainable utilization of wood and charcoal
for cooking and lighting; use of the high value organic fertilizer from the bio-slurry; and
improvement of health and development conditions for rural households.

The main objective of the first phase of the Programme is to develop a commercially
viable domestic biogas sector in Ethiopia.

The Specific objectives are to:

• attract and strengthen institutions and organizations for the development of a national
biogas sector;
• construct 14,000 biogas plants in the four selected regions over a period of 5 years;
• ensure continued operation of the biogas plants installed under the NBP;
• maximize the benefits of all biogas plants installed.

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 Brief Programme Profile / National Biogas programme Ethiopia

4. Description of the Programme

The approach of the NBP will be market-oriented, with the user of the biogas technology
in central position. Through private sector competition, potential users will benefit from
reduced costs while the private sector can be ensured of growing business opportunities
through an increasing demand for biogas technology.

The programme comprises eight major components: promotion and marketing, training,
quality management, research and development, monitoring and evaluation, institutional
support, extension, and gender mainstreaming.

To enable potential users to make an investment decision, they will be provided with full
information about the benefits of biogas technology, including financial incentives and
benefits, installation and maintenance costs, operational issues, guarantee and after-sales
service, Contribution to construction cost, support structure, quality assurance and
durability.

The private sector (biogas companies, cooperatives, and biogas appliance and component
manufacturers) will be called upon for house-to-house promotion of the technology,
construction of the biogas plants and after-sale service provision. A support structure will
be developed, which will provide a contribution to construction cost to promote the
biogas technology, enable access to microfinance, support promotional and extension
activities, and ensure that a minimum level of quality is maintained so as to safeguard the
reputation of the biogas technology.

Microfinance will make domestic biogas affordable by supplying long-term credits to

farmers wishing to purchase the technology at a low interest rate. NGOs, construction
cooperatives and private sector companies will assist the biogas users in acquiring micro-
credit.

Major outputs of the Programme will include promotional and extension materials;
various studies related to biogas adoption, financing and social, economic and
environmental impact; standard designs for biogas plants; trained, certified and registered
masons; three regional training and resource centres established within existing
vocational training institutions; and formation of several construction cooperatives/
companies. This is in addition to the 14,000 biogas plants (with slurry pits and indoor
cooking facilities) that will be constructed and a minimum of 7,000 domestic toilets to be
attached to the plants.

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 Brief Programme Profile / National Biogas programme Ethiopia

5. Location of the Programme

To promote the uptake of domestic biogas, the first phase of the programme will be
implemented in selected woredas in Oromia, Amhara, SNNP and Tigray regional states.
The selected woredas include:
In Oromiya: Adaà, Dugda Bora, Hetosa, Ambo and Kuyu
In Amhara: Bahir Dar Zuria, Dembia, Gondar Zuria, Fogera and Dangla
In SNNPRS: Dale, Mareko, Meskan, Arba Minch Zuria and Derashe Special
Woreda
In Tigray: Hintalo Wajirat, Raya Azebo and Western Tigray

The rationale for starting in these four regions is based on several factors: (i) the four
regions have most of the human (> 70 %) and livestock population (~ 70 %); (ii) the loss
of vegetative cover as a consequence of severe deforestation, resulting in a huge rural
household energy imbalance; (iii) the regions’ status with regard to educated human
resources and technology adoption experience; (iv) the availability of relatively well-
documented information; (v) a woody biomass consumption that exceeds annual
increment in more than two-thirds of the woredas located in the highland areas in those
regions.

6. Cost and Financing

The total budget requirement for the implementation of the pilot phase of the National
Biogas Programme is € 16.7 million, or ETB 208 million, over a period of 5 years (and
without taking inflation into consideration). The budget is stated in Euro, based on the
September 2007 exchange rate (1 € = 12.5 ETB). An overview of the programme’s
budget is presented in table 1.

Costs include the investment costs for the household (construction cost and financing
cost), programme support costs (promotion and training, finance, training, extension,
programme management, etc.) and technical assistance (advisory, knowledge brokering,
networking and advocacy). For the budget calculation the price level for an average 6 m3
biogas plant is used.

Table 1. Summary project budget (not corrected for inflation

NBP pilot phase summary project budget in Euro
1 2 3 4 5 total
Farmer investment 81,967 491,803 1,147,539 1,721,309 2,295,079 5,737,697
Credit financing costs 17,907 170,444 250,702 376,052 501,403 1,253,508
Contributions to construction cost 38,433 230,597 538,061 807,091 1,076,121 2,690,303

Regional Biogas Support programme 433,598 554,694 618,618 758,237 849,408 3,214,554
(RBPCO)
National Biogas Support programme 365,630 367,837 366,812 385,337 377,160 1,862,775
(NBPCO)
Technical Assistance 412,300 442,300 423,100 335,300 290,500 1,903,500

Total project 1,349,835 2,194,675 3,344,832 4,383,326 5,389,671 16,662,337

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 Brief Programme Profile / National Biogas programme Ethiopia

Proposed contributors to the costs of the NBP include the farmers, the federal
government, the regional governments, external donors (Biogas for Africa Initiative) and
SNV/Ethiopia. The contributions to construction cost are borne by the federal
government (10 %) and external donors (90 %). Through the mobilisation of carbon
credits, revenues will be generated that could contribute to the financing of the
Contribution to construction cost and future up-scaling of the National Biogas
Programme.

7. Benefits
The benefits of domestic biogas are divided over multiple levels (micro, meso and macro)
of the society and differ in the extent to which they can be translated in direct economic
gains (formal versus informal).

Some 14,000 households will reap direct benefits from domestic biogas through the
reduced use of traditional fuel sources, access to clean energy, reduced workload and
health improvement—all resulting in improved living conditions, from which particularly
women and children will benefit, and through improved soil fertility owing to the use of
quality bio-fertilizer and resulting in improved agricultural output.

As table 2 shows, the benefits of biogas are not limited to the rural households only.
Biogas contributes to job creation and skills enhancement (masons, managers,
technicians, extension staff), private sector development (at least 20 biogas SMEs per
region, 12 construction companies/cooperatives, 4 appliance manufacturers), saving of
foreign exchange as a result of a reduced use of kerosene, economic return for the public
(economic internal rate of return of 78% for Ethiopia), slowing down of the rate of
deforestation, and greenhouse gas reduction.

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 Brief Programme Profile / National Biogas programme Ethiopia

Table 2. Biogas benefits matrix

Level Informal Formal
− Reduced indoor smoke-induced illnesses − Reduced direct medical costs
− Reduced poor-sanitation induced illnesses − Reduced expenses on
− Reduced drudgery from fuel wood collection conventional energy sources
− Reduced pressure for illegal forest − Reduced chemical fertilizer
Macro

encroachment expenditures
− Reduced drudgery from weeding fields − Increased opportunity for
− Reduced workload for food-preparation (small-scale) organic
− Reduced soil erosion/degradation agriculture
− Improved opportunity for education − Improved agricultural yields
− Increased family income
− Reduced risk of erosion and landslides in − Increased employment and
mountainous areas income-generating
Meso

− Improved forest quality and quantity opportunities

− Reduced pollution of the environment as a result − Opportunity to develop markets
of uncontrolled dumping of animal waste for (organic) agricultural
produce
− Reduction of illness-induced production losses − Reduced (forex) costs on
− Improved biodiversity medication
− Increased non-marketable (non-timber) forest − Reduced health system
products availability expenses
− Reduced mortality − Reduced (forex) costs on
− Improved human resource base chemical fertilizer
− Reduced risks resulting from global warming − Reduced (forex) costs on fossil
Micro

fuels
− Increased availability of
marketable (non-timber) forest
products
− Increased agricultural
production
− Increased tax revenues
− Generating Clean Development
Mechanisms revenue

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 Brief Programme Profile / National Biogas programme Ethiopia

8. Institutional Arrangement
As an apex organization EREDPC is responsible for monitoring and evaluation of the
overall programme activities. It is also responsible for the approval of annual plans and
reports.

For the day-to-day coordination of the programme, EREDPC will delegate

responsibilities to a semi-autonomous National Biogas Programme Coordination Office
(NBPCO). This office will initiate, coordinate, and monitor the activities within the
biogas sector, and be responsible for accounting, financial procedures, and staff
management. Reporting to EREDPC, the NBPCO will work with both the private and
public sectors of the programme stakeholders/partners. Representatives of the main
national level programme actors will form a Biogas Sector Steering Committee for
advising on policy and programme matters that relate to programme implementation.

SNV-Ethiopia and other local capacity builders will provide technical assistance through
advisory services, resource mobilisation and knowledge brokering.

At regional level, the MEAs/Energy Departments will play a role comparable to that of
EREDPC, while the regional Biogas Programme Coordination Offices will coordinate,
facilitate and monitor day-to-day programme activities; also, they will establish
partnerships with the Bureaus of Agriculture and Rural Development (BoARDs) for the
promotion of biogas technology through the extension network of the BoARDs at the
zonal, woreda and kebele levels. In a similar way as at a national level, all biogas
activities will be periodically monitored and advised by a regional Biogas Sector Steering
Committee (RBSSC). Figure 1 illustrates the institutional arrangements.

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 Brief Programme Profile / National Biogas programme Ethiopia

Donor

Ministry of Mines
MoFED
& Energy
Federal Government

EREDPC

National Biogas Sector

Steering Committee

EREDPC / NBPCO National Biogas Programme

SNV
Bank Account Coordination Office (NBPCO)

Sector
Stakeholders
Regional Government

Mines & Energy

BoFED
Agency /
Department
Regional Biogas Sector
MEA / RBPCO Bank
Steering Committee
Account

Regional Biogas Programme

Coordination Office (RBPCO)

Implementation

BIOGAS Cooperation
Woreda MFI Pvt Sec NGOs Regional
Administration Government
Programme Fund Flow Offices

Capacity development Biogas Users

Cooperation
Figure 1. Institutional arrangements

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 Brief Programme Profile / National Biogas programme Ethiopia

9. Status of the Programme

A detailed programme implementation document (PID) has been prepared following
upon the positive prospects for biogas development in Ethiopia as revealed by the
feasibility study. A consortium of several international donors formed in May 2007 in
Nairobi – Biogas for Africa – has declared that it considers funding the programme. The
four regional governments have made a commitment to integrate the programme in their
yearly budget planning. The Association of Ethiopian Microfinance Institutions
(AEMFI)has expressed a keen interest to build a long-term partnership with the National
Biogas Programme and develop a credit line for domestic biogas.

10. Duration and Implementation of the Schedule

A total of 5 years is envisaged to implement the first phase of the programme, starting in
2008 and ending in 2012. Implementation will start with the launching of a demonstration
phase, with construction of 100 biogas plants in eight selected woredas in the four
regions. Up-scaling construction to 100,000 biogas plants is foreseen for a subsequent
phase.

The major activities, with costs involved and the share of financing in the programme are
given in tables 3-7.

Table 3. Annual Contribution to construction cost requirement

[Euro]
1 2 3 4 5 Total

# of plants 200 1200 2800 4200 5600 14000

Contribution to construction cost requirement 38.433 230.597 538.061 807.091 1.076.121 2.690.303

National Government share 10% 10% 10% 10% 10% 10%

Contribution national government 3.843 23.060 53.806 80.709 107.612 269.030

Donor share 90% 90% 90% 90% 90% 90%

Contribution donor 34.590 207.538 484.255 726.382 968.509 2.421.273

Table 4. Proposed budget breakdown and financial contribution

Proposed Budget Proposed Financing

Euro Budget [Euro]

Euro per plant share Euro total / plant share

Plant Investment cost 9.681.508 692 58% Farmers 6.991.205 499 42%
National Government 269.030 19 2%
Donor 2.421.273 173 15%

Programme Support 5.077.329 363 30% National Government 467.722 33 3%

Regional Government 540.885 39 3%
Donor (RBPCO) 2.673.669 191 16%
Donor (NBPCO) 1.395.053 100 8%

Technical assistance 1.903.500 136 11% Total SNV 1.903.500 136 11%

Total € 16.662.337 1.190 100% Total € 16.662.337 1.190 100%

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