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Catalysing Leadership on Efficient Bagasse Processing: Case Study on Pakistan Sugar

Industry

Qazi Sabir – Iqbal Hamid Trust, Pakistan

Areej Riaz - CDKN

ALP Regional Workshop, October 2015

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Objectives

•Provide an overview of LEDS in Bagasse processing

• Share learning of what worked well and didn’t work well in Pakistan

• Explore next steps towards ensuring long term, sustainable application of LEDS for crop processing

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Efficient Processing in Sugar Industry

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Sugar Production – The Process

Source: CSR Australia

Harvesting

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Sugar Production – Aiming for Efficiency

High Pressure Cogeneration Technology

Consumes 46% less bagasse for the same amount of electricity production compared to conventional low pressure technology (23 bars vs. 66 bars)

Can generate up to 1 MW of electricity using 5.5 tons of steam compared to 11 tons of steam consumed by low pressure technology

Sugar Industry in Pakistan

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Agriculture is integral to economy in Pakistan:24% of GDP50% of labor forceLargest source of foreign exchange earnings

Sugar is the second largest agro-based industry - 86 mills

Electricity shortfall = 4000MW (2% of GDP loss)

Potential of electricity generation to grid by sugar industry = 1000 MW

Overview of Sugar Industry in Pakistan

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UNIT 000 000

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Things are changing…Regulations:- National Policy for Power Co-generation, MoWP- Upfront tariff, NEPRAFramework for Power co-generation 2013 , AEDB

Government interest:Ministry of Climate Change led initiative on NAMA for sugar industry

Financial institutions:Scheme for Financing Power Plants Using Renewable Energy, State Bank of Pakistan

International Support:Switch Asia project - capacity building, regulatory aspects, financial access

MoWP: Ministry of Water and Power NEPRA:National Electric Power Regulatory Authority AEDB: Alternative Energy Development Board

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First to switch to HPC technology Two crop cycles lost, incurring huge losses Negative impact on sugar mills and technology

providers In the process to implement 41 MW

cogeneration facility

Two bagasse-based, HPC power plants capacity of 53 MW in 2014

Supplying to national grid under long-term Energy Purchase Agreements executed with the Central Power Purchasing Agency

One step back, two steps forward - Almoiz

Leading by Example - JDW

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S.No Project Company Capacity (MW) Current Status

1. M/s Chiniot Power Ltd at Chiniot, Punjab 62.40 MW EPA & IA signed

Financial close achieved

COD to be achieved by CPPA

2. M/s RYK Mills Limited (RYKML) at Rahim Yar Khan, Punjab 30MW LoS issued.

EPA, IA and GoP Guarantee have been signed.

Financial Closing declaration is at review stage.

3. M/s Hamza Sugar Mill Limited at Khanpur, District Rahim Yar Khan, Punjab

15 MW Achieved LoI milestones.

LoS issued.

4. M/s Alliance Sugar Mills Ltd at Rasheedabad, Ubauro, District Ghotki, Sindh

19 MW LoI issued.

5. M/s Layyah Sugar Mills ltd at Karoor Road, District Layyah, Punjab 41 MW LoI issued.

6 M/s Safina Sugar Mills Ltd at 03-KM Chiniot 10– Sargodha Road, Lalian, District Chiniot, Punjab

20 MW LoI issued.

7. M/s Almoiz Industries Ltd at Adda Hameed Kot, District Mianwali, Punjab

36 MW LoI issued.

8. M/s Etihad Power Generation Limited at, Mouza Karamabad, District Rahim Yar Khan, Punjab

67 MW LoI issued.

9. M/s Shahtaj Sugar Mills Ltd at, Mandi Bahauddin, Punjab 15 MW LoI issued.

10 M/s Chanar Energy Limited, District Faisalabad 22MW LoI Issued.

Upcoming HPC (Sugar Industry) Power Plants listed by AEDB

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• Industries have expressed interest for CDM benefits which can be tied to tech uptake through NAMA and related tools. Relevant regulatory authorities and industries need to include relevant capacity to ensure tech friendly regulations are produced.

Building on and multiplying interest

• Low profits (low interest rate) and high risk (industries’ performance) are among the reasons why financial institutions aren’t investing in HPC technology in Pakistan. Risk profiling and covering credit risk from other sources will help mobilize investment

Low risk factors and higher profit margin can mobilize

investors

•Sugar industry is taking action in silo and on their own. The only way to ensure efficient processing is taken up by the majority is by ensuring buy-in and building drive in leaders (associations ) and champions (role models/change makers)

Catalyzing Leadership helps scale up for LEDS

Lessons learned and next steps

We welcome your feedback and questions

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