PROJECT REPORT

Of

BIOGAS

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Biogas.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : info@udyami.org.in
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxxxxxxx
Mobile xxxxxxx

5 Product and By Product : BIOGAS

6 Name of the project / business activity proposed : BIOGAS UNIT

7 Cost of Project : Rs.20.28 Lakhs

8 Means of Finance
Term Loan Rs.15.75 Lakhs
Own Capital Rs.2.03 Lakhs
Working Capital Rs.2.5 Lakhs

9 Debt Service Coverage Ratio : 1.87

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 54%

13 Employment : 8 Persons

14 Power Requirement : 20.00 HP

15 Major Raw materials : Crop waste, Animal waste,Municipal waste,Agro-industry waste,Forest waste

16 Estimated Annual Sales Turnover (Max Capacity) : 43.15 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 17.00
Furniture & Fixtures 0.50
Working Capital 2.78
Total 20.28

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.03

Working Capital(Finance) 2.50

Term Loan 15.75

Total 20.28
 BIOGAS

Introduction: Biogas is a flammable gas that accrues from the fermentation

of biomass in biogas plants. Biogas typically refers to a gas produced by the
biological breakdown of organic matter in the absence of oxygen. Biogas
originates from biogenic material and is a type of biofuel. Biogas is a
renewable source of energy. Organic waste such as dead plant and animal
material, animal dung and kitchen waste can be converted into a gaseous fuel
called biogas. Biogas comprises primarily methane (CH4) and carbon dioxide
and may have small amounts of hydrogen sulphide (H2S) moisture and
siloxanes. The gases methane, hydrogen and carbon monoxide(CO) can be
combusted or oxidised with oxygen. Biogas can be used as a fuel for any
heating purpose such as cooking. It can also be used in a gas engine to convert
the energy in the gas into electricity and heat. Biogas can be compressed much
like natural gas, and used to power motor vehicles.
 

Biogas Plant: A biogas plant is the name often given to an anaerobic

digester that treats waste or energy crops. Biogas can be produced using
anaerobic digesters. A biogas plant consists of the following things:

 Concrete tank (digester)- The bio wastes are digested here by the
microbes here so as obtain the methane gas.
 Floating Cover- It is placed over the tank and it keeps on rising as the
quantity of gas keeps on increasing in the tank.
 Outlet – The outlet is connected to a pipe through which the gas is
extracted and further used
 Slurry Collector- Here cow dung is added to rest of the bio waste with
water and as Cowdung which contains bacteria methanogens, which is
present in the rumen part of the stomach of cattle, that acts the bio
wastes and produce methane gas.
 Sludge Collector- The Spent slurry is removed through this section and
can be used as fertilizer for various purposes.

Uses & Market Potential: Biogas is environment friendly and has various
applications. They are cooking, drying, cooling, heating etc. It is used in
producing electricity, methanol and production of steam. Below are the same
other biogas uses in different fields:

 Biogas for home

 Biogas for electricity
 Provides decentralised fuel supply and waste management.
 Gas is useful as a fuel substitute for fire wood, dung, agricultural
residues, petrol diesel and electricity.
 Best boon in waste management.
 Bio-CNG
Biogas has emerged as a promising renewable technology to convert
agricultural, animal, industrial and municipal wastes into energy. Biogas
development can be integrated with strategies to improve sanitation as well
as reduce indoor air pollution and greenhouse gases. Currently, the total
biogas production in India is 2.07 billion m3/year. Biomass is one of the major
energy sources used in rural India covering nearly 96% of energy sources,
however its utilization is highly inefficient due to a lack of proper stoves in
most households.

Raw Material: Major raw materials are as follows:

1. Crop waste
2. Animal waste
3. Municipal waste
4. Agro-industry waste
5. Forest waste

Assuming average raw material cost per Kg Rs. 3 -5.

Machinery requirement: Major machinery & equipments are:

S No. Machine Unit Price
1. Biogas Plant 1 1000000
2. FRP Tank (5 m x 5 m) 1 115000
3. Surry Storage Tank (5m x 5m) 1 115000
4. Sledge Pump to Pump the waste 1 95000
5. Crusher Machine (5 HP) 1 325000
6. Excavation 1 50000
Total Amount 1700000


Manufacturing Process: Biogas Production Process (Food Waste & Cow
dung)

The various food waste are procured form agro-industry & municipal bodies,
while the Cow dung is obtained from dairy farms & farmer groups. All these
raw material are stored in appropriate storage facilities composed of bins and
appropriate enclosing structure. The food waste is sent to crusher which
essentially crushes the various sizes food waste into an appropriate size &
form to be used for making slurry. This crushed food waste, along with Cow
dung is added to slurry tank with water. The slurry tank has its own agitator
to form a uniform slurry. The Slurry is then pumped into digester of biogas
plant which essentially decomposes the organic waste, releasing mostly
methane and other gases, which are collectively called as biogas. The gas
deposits in dome or floating cover, from where it’s extracted via flow control
valve periodically. The used slurry or sludge is pumped out of digester into a
sludge tank which can be used as manure. The biogas is collected in a large gas
receiver from, where it’s sucked in by compressor and collected in its receiver,
which acts as a temporary holding tank. This gas is then either filled in gas
cylinders utilizing appropriate pressure regulator & valves; which are later
sold or gas is simply filled in a large pressure vessel from where the supply is
provided to customers via regulator & pipeline arrangement.

Area:

The industrial setup requires space for Inventory, workshop or manufacturing

area, space for power supply utilities and auxiliary like Generator setup. Also
some of the area of building is required for office staff facilities,
documentation, office furniture, etc. Thus, the approximate total area required
for complete industrial setup is 2000 to 2500Sqft.

Power Requirement –The power consumption required to run all the

machinery could be approximated as 20hp

Manpower Requirement– There are requirement of skilled machine

operators to run the machine set. Experience quality engineers are required
for desired quality control. Some helpers are also required to transfer the
material from one work station to other. Office staffs are required to maintain
the documentation. The approximate manpower required is 8 including 1
Supervisor, 1 Plant operator, 1 unskilled worker, 1 Helper and 1 Security
guard. 3 Skilled worker including Accountant, Manager and Sales person.

Bank Term Loan: Rate of Interest is assumed to be at 11%

Depreciation: Depreciation has been calculated as per the Provisions of

Income Tax Act, 1961

Approvals & Registration Requirement:

Basic registration required in this project:

 GST Registration
 Udyog Aadhar Registration (Optional)
 Fire/pollution license as required
 PESO License
 Choice of a Brand Name of the product and secure the name with
Trademark if required.

Implementation Schedule:
S No. Activity Time required
1. Acquisition of premises 1-2 Months
2. Procurement & installation of Plant & Machinery 1-2 Months
3. Arrangement of Finance 1.5-2 Months
4. Requirement of required Manpower 1 Month
5. Commercial Trial Runs 1 Month
Total time Required (some activities shall run 5-6 Months
concurrently)

FINANCIALS
PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 2.03 -

Reserve & Surplus 2.14 3.47 4.79 6.47 8.70
Depriciation & Exp. W/off 2.60 2.21 1.88 1.60 1.36
Increase In Cash Credit 2.50
Increase In Term Loan 15.75 - - - -
Increase in Creditors 0.16 0.02 0.03 0.03 0.03

TOTAL : 25.17 5.70 6.70 8.11 10.09

APPLICATION OF FUND

Increase in Fixed Assets 17.50 - - - -

Increase in Stock 0.55 0.09 0.11 0.11 0.12
Increase in Debtors 2.57 0.43 0.41 0.44 0.46
Repayment of Term Loan 1.75 3.50 3.50 3.50 3.50
Taxation - - - 0.65 0.87
Drawings 1.00 1.50 2.00 3.00 4.00
TOTAL : 23.37 5.53 6.02 7.70 8.95

Opening Cash & Bank Balance - 1.80 1.98 2.66 3.07

Add : Surplus 1.80 0.18 0.68 0.41 1.14

Closing Cash & Bank Balance 1.80 1.98 2.66 3.07 4.21
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 3.17 5.14 7.92 10.75
Add: Additions 2.03 - - - -
Add: Net Profit 2.14 3.47 4.79 5.83 7.83
Less: Drawings 1.00 1.50 2.00 3.00 4.00
Closing Balance 3.17 5.14 7.92 10.75 14.57
CC Limit 2.50 2.50 2.50 2.50 2.50
Term Loan 14.00 10.50 7.00 3.50 -
Sundry Creditors 0.16 0.18 0.21 0.24 0.27

TOTAL : 19.82 18.32 17.63 16.99 17.34

APPLICATION OF FUND

Fixed Assets ( Gross) 17.50 17.50 17.50 17.50 17.50

Gross Dep. 2.60 4.81 6.70 8.30 9.66
Net Fixed Assets 14.90 12.69 10.80 9.20 7.84

Current Assets
Sundry Debtors 2.57 3.01 3.42 3.85 4.31
Stock in Hand 0.55 0.65 0.75 0.87 0.98
Cash and Bank 1.80 1.98 2.66 3.07 4.21

TOTAL : 19.82 18.32 17.63 16.99 17.34

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 9.98 12.33 14.36 16.53 18.85
Sale of By-Product(Slurry) 15.75 17.72 19.80 21.99 24.30
Total (A) 25.73 30.05 34.16 38.52 43.15

B) COST OF SALES

Raw Material Consumed 3.15 3.60 4.20 4.85 5.40

Elecricity Expenses 2.26 2.42 2.58 2.74 2.90
Repair & Maintenance 1.50 1.85 2.15 2.48 2.83
Labour & Wages 7.69 8.84 9.90 11.29 12.41
Depreciation 2.60 2.21 1.88 1.60 1.36

Cost of Production 17.19 18.92 20.71 22.95 24.91

Add: Opening Stock /WIP - 0.45 0.53 0.61 0.70

Less: Closing Stock /WIP 0.45 0.53 0.61 0.70 0.80

Cost of Sales (B) 16.74 18.84 20.63 22.86 24.81

C) GROSS PROFIT (A-B) 8.98 11.21 13.53 15.66 18.34

34.92% 37.31% 39.60% 40.65% 42.50%
D) Bank Interest (Term Loan ) 1.71 1.40 1.01 0.63 0.24
ii) Interest On Working Capital 0.28 0.28 0.28 0.28 0.28
E) Salary to Staff 4.66 5.83 7.17 7.96 8.75
F) Selling & Adm Expenses Exp. 0.20 0.25 0.29 0.33 0.38

TOTAL (D+E) 6.84 7.74 8.74 9.19 9.64

H) NET PROFIT 2.14 3.47 4.79 6.47 8.70

8.3% 11.5% 14.0% 16.8% 20.2%
I) Taxation - - - 0.65 0.87

J) PROFIT (After Tax) 2.14 3.47 4.79 5.83 7.83

COMPUTATION OF MAKING OF BIOGAS

Item to be Manufactured Biogas

Manufacturing Capacity per day 1500 Kg
No. of Working Hour 8
No of Working Days per month 25
No. of Working Day per annum 300
Total Production per Annum 4,50,000.00
Final Product
Gas Produced per day 300.00 Cubic meter
Power generated per day 375.00 unit
Power generated per annum 1,50,000 unit
Total Production per Annum 1,50,000 unit

Year Capacity BIOGAS

Utilisation

I 70% 1,05,000.00
II 75% 1,12,500.00
III 80% 1,20,000.00
IV 85% 1,27,500.00
V 90% 1,35,000.00

Raw Material Consumed Capacity Rate per Kg Amount (Rs.)

Utilisation

I 70% 3.00 3.15

II 75% 3.20 3.60
III 80% 3.50 4.20
IV 85% 3.80 4.85
V 90% 4.00 5.40
COMPUTATION OF SALE
Particulars I II III IV V

Op Stock - 5,250.00 5,625.00 6,000.00 6,375.00

Production 1,05,000.00 1,12,500.00 1,20,000.00 1,27,500.00 1,35,000.00

1,05,000.00 1,17,750.00 1,25,625.00 1,33,500.00 1,41,375.00

Less : Closing Stock(15 Days) 5,250.00 5,625.00 6,000.00 6,375.00 6,750.00

Net Sale 99,750.00 1,12,125.00 1,19,625.00 1,27,125.00 1,34,625.00

Sale Price per unit 10.00 11.00 12.00 13.00 14.00

Sale (in Lacs) 9.98 12.33 14.36 16.53 18.85

Computation of By Product(Slurry)

Production Capacity Unit Rate Total

I 70% 315000 5.00 15.75

II 75% 337500 5.25 17.72

III 80% 360000 5.50 19.80
IV 85% 382500 5.75 21.99
V 90% 405000 6.00 24.30
BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary
Supervisor 20,000.00 1 20,000.00
Plant Operator 15,000.00 1 15,000.00
Unskilled Worker 12,000.00 1 12,000.00
Helper 8,000.00 1 8,000.00
Security Guard 6,000.00 1 6,000.00

61,000.00
Add: 5% Fringe Benefit 3,050.00
Total Labour Cost Per Month 64,050.00
Total Labour Cost for the year ( In Rs. Lakhs) 5 7.69

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Manager 20,000.00 1 12,000.00
Accountant cum store keeper 15,000.00 1 15,000.00
Sales 10,000.00 1 10,000.00
Total Salary Per Month 37,000.00

Add: 5% Fringe Benefit 1,850.00

Total Salary for the month 38,850.00

Total Salary for the year ( In Rs. Lakhs) 3 4.66

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
0.45 0.53 0.61 0.70 0.80
Raw Material
0.11 0.12 0.14 0.16 0.18

Closing Stock 0.55 0.65 0.75 0.87 0.98

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 0.55
Less:
Sundry Creditors 0.16
Paid Stock 0.39 0.04 0.35

Sundry Debtors 2.57 0.26 2.32

Working Capital Requirement 2.67

Margin 0.30

MPBF 2.67
Working Capital Demand 2.50
COMPUTATION OF DEPRECIATION

Plant &
Description Land Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance Leased - - -
Addition - 17.00 0.50 17.50
- 17.00 0.50 17.50
- -
TOTAL 17.00 0.50 17.50
Less : Depreciation - 2.55 0.05 2.60
WDV at end of Ist year - 14.45 0.45 14.90
Additions During The Year - - - -
- 14.45 0.45 14.90
Less : Depreciation - 2.17 0.05 2.21

WDV at end of IInd Year - 12.28 0.41 12.69

Additions During The Year - - - -
- 12.28 0.41 12.69
Less : Depreciation - 1.84 0.04 1.88
WDV at end of IIIrd year - 10.44 0.36 10.80
Additions During The Year - - - -
- 10.44 0.36 10.80
Less : Depreciation - 1.57 0.04 1.60
WDV at end of IV year - 8.87 0.33 9.20
Additions During The Year - - - -
- 8.87 0.33 9.20
Less : Depreciation - 1.33 0.03 1.36
WDV at end of Vth year - 7.54 0.30 7.84
 REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter 15.75 15.75 0.43 - 15.75
Iind Quarter 15.75 - 15.75 0.43 - 15.75
IIIrd Quarter 15.75 - 15.75 0.43 0.88 14.88
Ivth Quarter 14.88 - 14.88 0.41 0.88 14.00
1.71 1.75
II Opening Balance
Ist Quarter 14.00 - 14.00 0.39 0.88 13.13
Iind Quarter 13.13 - 13.13 0.36 0.88 12.25
IIIrd Quarter 12.25 - 12.25 0.34 0.88 11.38
Ivth Quarter 11.38 11.38 0.31 0.88 10.50
1.40 3.50
III Opening Balance
Ist Quarter 10.50 - 10.50 0.29 0.88 9.63

Iind Quarter 9.63 - 9.63 0.26 0.88 8.75

IIIrd Quarter 8.75 - 8.75 0.24 0.88 7.88
Ivth Quarter 7.88 7.88 0.22 0.88 7.00
1.01 3.50
IV Opening Balance
Ist Quarter 7.00 - 7.00 0.19 0.88 6.13
Iind Quarter 6.13 - 6.13 0.17 0.88 5.25
IIIrd Quarter 5.25 - 5.25 0.14 0.88 4.38
Ivth Quarter 4.38 4.38 0.12 0.88 3.50
0.63 3.50
V Opening Balance
Ist Quarter 3.50 - 3.50 0.10 0.88 2.63
Iind Quarter 2.63 - 2.63 0.07 0.88 1.75
IIIrd Quarter 1.75 - 1.75 0.05 0.88 0.88

Ivth Quarter 0.88 0.88 0.02 0.88 -

0.24 3.50

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R

PARTICULARS I II III IV V

CASH ACCRUALS 4.74 5.68 6.67 7.43 9.19

Interest on Term Loan 1.71 1.40 1.01 0.63 0.24

Total 6.45 7.08 7.68 8.05 9.43

REPAYMENT
Repayment of Term Loan 1.75 3.50 3.50 3.50 3.50
Interest on Term Loan 1.71 1.40 1.01 0.63 0.24

Total 3.46 4.90 4.51 4.13 3.74

DEBT SERVICE COVERAGE RATIO 1.86 1.45 1.70 1.95 2.52

AVERAGE D.S.C.R. 1.87

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 20
Load Factor 0.7460
Electricity Charges per unit 7.50
Total Working Days 300
Electricity Charges 2,68,560.00

Add : Minimim Charges (@ 10%)

(B) DG set
No. of Working Days 300 days
No of Working Hours 0.3 Hour per day
Total no of Hour 90
Diesel Consumption per Hour 8
Total Consumption of Diesel 720
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel 0.47

Add : Lube Cost @15% 0.07

Total 0.54

Total cost of Power & Fuel at 100% 3.22

Year Capacity Amount

(in Lacs)

I 70% 2.26
II 75% 2.42
III 80% 2.58
IV 85% 2.74
V 90% 2.90
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
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without warranties.