Quito does not have a wastewater treatment plant. The domestic, commercial and industrial wastewater from Quito are discharged into the neighbouring water bodies. 75% of the wastewater is discharged into the Machangara river, 20% of it is discharged in Monjas river, and the remaining goes into the San Pedro river. The Machangara river is the discharge point for most of Quito’s raw wastewater. This project examines the feasibility of developing a wastewater treatment plant with the intent to generate methane and clean the Machangara River, and propose it as a CDM project. Based on the design of a wastewater treatment plant in order to eliminate part of the contamination of the Machangara river complemented with technologies for methane recovery, and an analysis of a suitable methane recovery plant is done getting the following results: Privatization is a good option to construct and manage this project. The initial investment requires big amount of money, and the government may not be able to afford it presently. Taxes that the municipality can charge are not high (US$ 0.0625/month). There are many enterprises interested in this business. Nevertheless, the municipality is in charge of controlling the privatization in order to avoid monopoly; and, This project can be applied as a CDM project, opening the global opportunity to deal with international organizations. An economical analysis is done, and its results show the profits this project can generate if it is accepted. These profits could help the municipality to improve its finances. Nevertheless, to be approved as a CDM project is not an easy task, and a complete technical project needs to be developed.