This paper concerns with the treatment of bagasse wash water, which is generated after washing the stored bagasse before its use in the paper manufacture. The bagasse wash water, treated earlier in open lagoons, is now treated by the anaerobic process using UASB reactor. This study, based upon an operating unit, shows that the UASB reactor reduces COD of wash water by 85% - 90%, and results in significant emission reductions. Economic analysis carried out by using financial indicators such as DSCR, Payback period and IRR reveals very attractive rate of returns and thus, greatly reduces the risks in financing such projects by the financial institutions.