The Union Ministry of Non-conventional Energy Sources on 25 September 2006, signed a $39.15 million project with UNDP Global Environment Fund and KfW of Germany for developing projects harnessing biomass energy resources of the country.

The three-year project will be financed by UNDPGEF to the extent of $5.65 million. The contribution of MNES and KfW will be $5.24 million and $24.82 million, respectively. Other participating financial institutions and private entities will bring in $3.44 million.

The project is aimed at removal of barriers, sustained supply of biomass, technology upgradation, equipment supply and development of standards for biomass energy projects.

In India, biomass energy has an established potential of about 19,000 MW while the co-generation power projects have a potential of about 5,000 MW. Currently, India has projects of over 1,000 MW  capacity based on biomass and co-generation.