Sustainable energy and drinking water access have been seen as major challenges for rural households in Bangladesh despite of governmental and non-governmental organizations have been made extensive efforts. This study contemplates a universal approach towards tackling both of these issues via biogas based polygeneration integrated with membrane distillation employed at the village level. The specific technologies chosen for the key energy conversion steps are as follows: plug-flow digester (co-digestion and mesophilic condition); internal combustion engine; and air-gap membrane distillation. The proposed techno-economic results show that daily electricity demand can be met with such a system while simultaneously providing 0.4 m3cooking fuel and 2–3 L pure drinking water. Cost analysis illustrates that the approach is highly favorable compare to other available system. The payback time of such system is between 2 and 2.5 years.