Climate Fund Managers, a climate-focused blended finance investment manager, has committed US$32.2 million from its EU-supported Climate Investor Two Construction Equity Fund to Akaia Green Fuels, a commercial scale waste-to-biogas facility in Uttar Pradesh, northern India. This initiative reflects the EU’s strong partnership with India on climate action, a priority reaffirmed at the 16th India–EU Summit. Through the partnership, the EU is accelerating decarbonisation – supporting industrial transition, scaling up green hydrogen and expanding renewable energy.
The investment will help reduce air pollution and greenhouse gas emissions by converting agricultural waste into compressed biogas – a renewable fuel that displaces imported fossil gas, while creating new income for rural communities. The project will convert ~94 000 tpy of agricultural and organic waste, including paddy straw, press mud from sugar mills and cow dung, into ~20 tpd of compressed biogas and ~123 tpd of fermented organic manure. Once operational, the facility is expected to avoid more than 100 000 t of CO2-e/y emissions and to improve air quality for an estimated 700 000 people across 640 villages by reducing open-field residue burning. The project will support significant job creation, including an estimated 480 roles during construction, 110 permanent operations and maintenance jobs and additional employment across the feedstock supply chain and logistics network.
Farmers will benefit from additional income from waste biomass sales, as well as access to cost-effective organic fertilizers such as fermented organic manure, a by-product of the compressed biogas process, supporting improved soil health and reducing reliance on chemical fertilizers.
Climate Fund Managers’ construction equity investment builds on US$3.3 million in early-stage development funding provided in 2023 by Climate Investor Two’s Development Fund, which supported critical development activities and helped de-risk the project ahead of financial close. This included support for land acquisition, pipeline access, securing long-term feedstock supply and gas offtake agreements, as well as financial and technical structuring in line with international standards. Construction commenced in February 2026 with full commercial operation targeted for 2H27.
India, one of the world’s largest producers of crops such as rice and sugarcane, generates millions of tonnes of agricultural residues each year, particularly in northern states. Much of this waste is currently burned in the open or left to decompose, but with improved management practices, there is a strong opportunity to reduce air pollutants and greenhouse gas emissions and help prevent severe seasonal smog. The Akaia Green Fuels project addresses this challenge by repurposing agricultural waste into clean energy and organic fertilizer products, while improving air quality. Through long-term supply agreements with local farmers and sugar mills, crop residues and organic by-products are collected and processed through anaerobic digestion, with the resulting biogas upgraded to compressed biogas.
The biogas produced will be injected directly into the city gas distribution network under long-term offtake agreements with India’s largest natural gas company, GAIL India, and state-owned oil and gas company, Hindustan Petroleum Corp. Ltd (HPCL), displacing imported fossil gas and strengthening India’s energy security.
The facility will be delivered by GPS Renewables under a fixed-price EPC and multi-year operations and maintenance contract, with independent technical oversight from European advisors Fichtner and TÜV to ensure compliance with international engineering, environmental and safety standards.
Jirong Lim, Investment Director at Climate Fund Managers, said: “Agricultural residue burning remains one of the most persistent environmental challenges in northern India. Projects like Akaia Green Fuels show how this waste can be transformed into clean energy, organic fertilizer and new income streams for farmers, while delivering meaningful improvements in air quality and emissions. By producing biogas that feeds directly into the gas network, the project supports India’s national objective to reduce reliance on imported natural gas while diversifying the energy mix and improving energy security. Climate Fund Managers’ blended finance approach enables solutions like this to be delivered at commercial scale and replicated across the country.”
Rajkumar Roy, Project Co-Sponsor, added: “This project turns an everyday problem for farmers and sugar mills into a long-term opportunity. By securing feedstock, offtake and high technical standards from the outset, we are building a robust, scalable model for compressed biogas infrastructure in India. Beyond clean energy, the project delivers tangible benefits for rural communities through additional income, better air quality and access to affordable organic fertilizer.”
Mainak Chakraborty, Co-Founder of GPS Renewables, commented: “We are delighted to welcome Climate Fund Managers into India’s CBG sector through their investment in Akaia Green Fuels. Their commitment underscores the maturity and scalability of CBG as a climate and energy solution for India, and we look forward to working together to set new standards for project quality, governance and impact.”
A community development programme will be developed and implemented in 2026, guided by an independent community needs assessment and expected to focus on areas such as rural development, education or improving the climate resilience of farm-based livelihoods. The project has already initiated early community development activities in collaboration with a local hospital, including funding medical check-ups and providing medication to nearby communities.
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