Anaerobic wastewater treatment in rural area has great potential for applications considering the lack of proper system of sewage collection, treatment and disposal in such areas. The advantage of the technology is production of biogas during the treatment which has further potential of utilization as fuel. However the bio gas thus produced requires some treatment prior its use especially for removal of hydrogen sulfide (H2S) and carbon dioxide (CO2) gases. The biogas has limited applications when utilized as a fuel in its gaseous form but if it is converted into electricity its application field becomes more and more wide. Moreover in developing countries, projects of biogas conversion into electricity may apply for the Clean Development Mechanism (CDM) under the Kyoto Protocol. This would further increase the economic viability of the project through the marketing of certified emission reductions (CERs). In the present paper various aspects of design of biogas production and conversion into electricity for a rural community are discussed. The various environmental and economic benefits of such projects are also discussed.