The rising energy demand and limited fossil reserves have driven planners to use renewable resources. This is especially important in meeting the demand for housing without power and gas-supply networks. In this study, relying on biological resources in Kermanshah province, biogas production capacity and economic evaluation in settlements on the outskirts of Kermanshah city using livestock dung were performed by cost-benefit method. The results of biogas production assessment have shown that the annual anaerobic digestion of a total of 2.83 thousand-tons of animal waste, has a biogas production capacity equivalent to 113744/05 m3.year-1, which can meet the gas demand in the case study and its surplus is used for the annual production of 46/67 MWh of electricity. Also, the results of economic evaluation of the construction of biogas production unit with power generation showed that the capital cost and the operation cost in the base year is equal to 10262/97 and 1337/53 million-Rials, respectively and the annual income from the sale of biogas, compost fertilizer and profits from the sale of electricity will be equivalent to 84/29, 2974/02 and 343/05 million-Rials.year-1, respectively. Therefore, in case of electricity generation from surplus biogas, the net present value will be positive and equal to 4481/32 million-Rials. Also, the cost benefit ratio is equal to 1/27 and the internal rate of return is equal to 37% which indicates the justifiability and profitability of the project.