AIIMS Director Randeep Guleria said the processing of organic waste will yield natural gas, water and bio-manure.
"We are planning to set up a recycling plant which will convert organic waste into natural gas which can further be used in laboratories and kitchens, cafeterias and the hostel mess as fuel. It can also be supplied to the houses of the staff and faculty," he said.
AIIMS has already joined hands with Japanese conglomerate Hitachi to set up a solar power generation unit in the hospital complex and reduce its electricity bill by 50 per cent over the next two years, another senior official said.
At present, its total electricity bill stands between Rs 48 crore and Rs 50 crore per year.
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"The aim is to strive towards reducing energy consumption and maximise the use of solar energy and other similar natural resources," Guleria said.
Japanese government organisation New Energy and Industrial Technology Development Organisation (NEDO), which promotes the development and introduction of new energy Technologies, will provide Rs 100 crore for the project.
The remaining cost of Rs 30 crore will be incurred by AIIMS.
The Union health ministry had announced its Green AIIMS project in June 2014 and aims at increasing the number of green -- or eco-friendly -- hospitals in the country.
Also, as part of the government's ongoing Swachhata Hi Sewa campaign, a collective pledge for cleanliness rendered by the director was taken by senior officials, faculty members, resident doctors, nurses and students of AIIMS.
Dr Guleria also declared a competition among centres and wards under various departments on maintaining cleanliness.