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EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
High Pressure Cogeneration for
Sugar Sector in Pakistan
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
EU SWITCH-Asia
Programme
Background• Initiated by the European Union and in line with the Regional
Strategy for Asia 2007-2013, managed by EuropeAid
• Promote sustainable consumption and production practices in
Asia by mobilizing the private and public sector
Priority Focus• Move SCP efforts from demonstration to replication
• Catalyze a shift in policy making towards sustainability
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
HP Cogen-Pak
Project
Project Objective• Promote sustainable production of energy, for export of surplus
electrical power to the national grid, through replication of
existing high pressure cogeneration technologies in the sugar
sector
• Promote sustainable consumption of bagasse by supporting
sugar mills in the adoption of high pressure cogeneration
technology through
– Technology standardization
– Enabling access to finance
– mobilization of relevant public sector authorities for the
formulation of a conducive regulatory regime for bagasse
based power projects.
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
HP Cogen-Pak
Project
Project Partners1. IHT Pakistan
2. The Energy and Resource Institute India (TERI)
3. Sequa Germany
4. Pakistan Sugar Mills Association (PSMA)
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Project Components
Financial Component
Awareness raising of FIs
regarding financial viability
of HPC technology
Improved capacity of FIs to
assess financial viability of
HPC projects
70 Pre-Feasibility Studies,
10 Feasibility Studies, 3-5
Local Technology
Providers of HPC
Technology
Output ResultComponent
Technology Component
Development of standardized
technology specifications &
capacity building of Sugar
Mills and local Technology
Providers
Sugar Mills confidence in
HPC technology Switch and
Local Availability of HPC
Technology
5 FIs offering financing for
HPC Technology, Financial
Closure of 10 HPC Project
Regulatory Component
Orientation of Power Sector
Player and stakeholders on
best practices power
purchase policy
Revised Power Purchase
Policy
Conducive regulatory
regime which will attract
Sugar Mills to invest in
HPC technology
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Component 1:
Training and Capacity Building of the Sugar
Sector and Technology Providers
Activities• Establishment of a National Bagasse Power Support Cell at the
PSMA, to offer technical, financial and regulatory assistance to
its members,
• Development of standardized technical specifications based on
regional best practices for high pressure equipment design and
operation, and preparation of project implementation tender
documents based on consultation among technology providers
and sugar mills,
• In-house trainings and capacity building of Technology Providers
to develop standardized HPC technology solutions
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Activities• Training of technical staff of sugar mills on standardized design
and technology selection
• Development of business cases of technology switch to HPC for 70 sugar mills
• B2B linkages between local and Indian technology providers of HPC systems
Outputs• 3-5 local technology providers offering technology solutions for
HP Cogeneration
• Sugar sector trained on HP technology selection and project management
• 70 pre-feasibilities for HP cogeneration systems developed, resulting in feasible business and investment plans
Training and Capacity Building of the
Sugar Sector and Technology Providers
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Training and Capacity Building of the
Technology Providers in Pakistan
HP Cogen-Pak conducted three Phases In-house training for
technology provider HMC, KSEW & Fabcon to enhance their
indigenous capacity in thermal and mechanical design of HP
boilers and design accessories of HP boiler etc.
More than 80 participants from three technology provider were
trained in these training sessions.
Training at HMC, Taxila Training at KSEW, Karachi Training at Fabcon, Lahore
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Two weeks Boiler Manufacturers Capacity building training for Pakistani
Boiler Manufacturers was held in Faridabad, India. This training was
conducted by National Power Training Institute (NPTI) with the
collaboration of The Energy and Resources Institute (TERI) from 13th to
25th of March, 2016. The participants of the training were experts from
DESCON Engineering & The Industrial Enterprises.
Training of Boiler
Manufacturers at NPTI,
India
Training of Boiler
Manufacturers at NPTI, India
Group photo at NPTI, IndiaTraining of Boiler
Manufacturers at NPTI, India
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen-Pak organized the specialized O&M Training for Sugar Sector under the umbrella of HP Cogen-Pak in Lahore & Karachi. The four days training program continued from 10th July 2017 to 13th July 2017 at Avari Hotel, Lahore, Pakistan & 17th July 2017 to 20th July, 2017 at Mövenpic Hotel, Karachi.
• The OMS (Pvt) Ltd was the resource organization, which provided expert trainers for different aspects of the training.
• More than 120 participants from sugar mills attended the training sessions in Karachi and Lahore.
Training & Capacity Building of Sugar
Mills' Staff”
International Trainer in O&M Training Workshop Participants, Lahore
O&M Training Workshop Participants, Lahore
O&M Training Workshop Participants, Karachi
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Development of Detailed Feasibility Studies
for Sugar Industries
Sugar Mills Name Sugar Mills Name
1. Shahtaj Sugar Mills Ltd. 2. Bandhi Sugar Mills (Pvt. ) Ltd.
3. Safina Sugar Mills Ltd. 4. Faran Sugar Mills Ltd.
5. TYA Sugar Mills (Pvt.) Ltd. 6. Ansari Sugar Mills (Pvt.) Ltd.
7. Shakarganj Mills Ltd.-I 8. Shakarganj Mills Ltd.-II
9. Mirpurkhas Sugar Mills Ltd. 10. Mehran Sugar Mills Ltd.
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Development of Pre-feasibility Studies for
Sugar Industries
Sugar Mills Name Sugar Mills Name
01-Noon Sugar Mill 13-Dewan Suger
02-Digri Sugar Mill 14-Popular Sugar Mill
03-Adam Sugar Mill 15-Rasool Nawaz Sugar Mill
04-Ittefaq Sugar Mill 16-Kiran Sugar Mill
05-Kashmir Sugar Mill 17-Mirza Sugar Mill
06-Ashraf Sugar Mill 18-Huda Sugar Mill
07-Khairpur Sugar Mill 19-Tandlianwala-II (Zamand)
08-Indus Sugar Mill 20-Tandlianwala-III (Hajira)
09-Habib Sugar Mill 21-Mecca Sugar Mill
10-Jauharabad Sugar Mill 22-Pattoki Sugar Mill
11-Sheikhu Sugar Mill 23-Baba Farid Sugar Mill
12-Husein Sugar Mill 24-Sanghar Sugar Mill
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Sugar Mills Name Sugar Mills Name
25-Matiari Sugar Mill 37-Naudero Sugar Mills
26-Hunza Sugar Mill 38-Tharparkar Sugar Mills
27-Haq Bahu Sugar Mill 39-Army Welfare Sugar Mills
28-Sindhabadgar Sugar Mill 40- Darya Khan Sugar Mills
29-Ranipur Sugar Mill 41- Al-Abbas Sugar Mills
30-Chasma Sugar Mill Unit I 42-Chasma-II Sugar Mills
31-SGM Sugar Mills 43-Gulf Sugar Mills
32-Khoski Sugar Mills 44-Tandlianwalla-I Sugar Mills
33-Bawany Sugar Mills 45-Sakrand Sugar Mills
34-Chambar Sugar Mills 46-Abdullah Sugar Mills
35-Larr Sugar Mills 47-Madina Sugar Mills
36-New Dadu Sugar Mills 48-Abdullah Shah Ghazi
Development of Pre-feasibility Studies
for Sugar Industries
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Component 2:
Improving Access to Finance
Activities• Financial risk assessment of bagasse based power projects
• Development of toolkits for SBP’s Schemes for Financing Power
Plants Using Renewable Power, and the Credit Guarantee
• Trainings of the 5 major FIs in Pakistan on bagasse based co-
generation projects and developed toolkits
• Training of sugar mill financial departments on toolkits and
CDM
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• Ensuring financial closure for 10 HPC projects,
• Development of project design document for CDM financing for
10 projects
Outputs• 5 FIs offering services to finance sugar sector HP cogeneration
projects
• Capacity building of the sugar sector to avail financial
opportunities
Improving Access to Finance
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen-Pak project team including international expert held a
series of meeting with the commercial banks of Pakistan &
financial institute to ascertain their existing lending practices
and documented their concerns in financing HPC projects.
Improving Access to Finance
Meeting with Pak Brunei Investment,
Karachi. Meeting with Meezan Bank, Karachi Meeting with Habib Metropolitan Bank,
Karachi.
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen-Pak project team conducted a GAP Analysis to see the existing impediments in the Access to Finance for the majority of Sugar Mills in Pakistan. The main issues Identified in the GAP Analysis are;
– High project sponsor risk
– Significant power sector circular debt
– Lack of effectiveness of State Bank of Pakistan (SBP) renewable energy facility
– No credit enhancement facility and
– Lack of transparency of information.
GAP Analysis
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HPC and EY worked closely with the SBP and relevant Financial Institutions to review and revise existing financial instruments for promotion of financing to Renewable Energy projects.
The activities comprised of:– Research into funding vehicles and financing structures being used for
funding renewable energy projects regionally and internationally.
– Research into barriers and impediments faced by sugar mills in terms of access to finance for their HPC projects.
– Comparative analysis of the policies and procedures adopted by regional (China, Malaysia, Thailand and other neighbouring countries) lending institutions and regulators for providing financial assistance for renewables based power projects.
– Identification and review of third party credit enhancements which may be utilized to spur RE based lending.
– Discussions with local banks, DFIs and multilateral agencies on the pros and cons of various credit enhancement options which can be employed to facilitate lending.
– Recommendations and suggestions for amendment of the Renewable Energy Financing Instrument.
Revision of Financing
Scheme for RE by SBP
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Under the revised scheme, concessionary financing will be provided through banks at 6%. Salient features of the Revised Scheme are:
• The Revised Scheme contains two Categories (I & II)– Under Category I: Financing will be provided for large renewable
energy projects ranging from (more than 1 MW to 50 MW).
– Under Category II: Financing will be provided for small scale renewable energy solutions (less than 1 MW) in order to promote renewable energy among consumers following NEPRA’s Net Metering Regulations of 2015.
• Financing limit has also been enhanced for different categories of renewable energy projects.
• Total tenor of loan has been extended from 10 to 12 years (for Category I) including maximum grace period of 2 years.
Revision of Financing
Scheme for RE by SBP
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen Pak Project organized two Information Dissemination Seminars on the “Revised SBP Financing Scheme for Renewable Energy” in collaboration with the State Bank of Pakistan. These seminars were held on 15th August, 2016 at Mövenpic Hotel, Karachi and 18th August 2016 at Avari Hotel, Lahore.
• More than 70 participants from sugar mills and leading commercial banks attended the events in Karachi and Lahore.
Dissemination of Financing
Scheme for RE by SBP
SBP Director briefing on Revised RE Policy in Lahore
Project Director addressing Revised RE Policy Dissemination Workshop Participants, Lahore
SBP Revised RE Policy Dissemination Workshop Participants, Karachi
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen Pak Project, in collaboration with The Energy Research Institute (TERI), have conducted a study on Risk Assessment Framework for High-Pressure Bagasse Cogeneration in Pakistan.
• In this study , the financial risks of bagasse based high pressure cogeneration system in Pakistan have been compared with those in India, China and Germany. This study will help banking sector of Pakistan assess the risks associated with HPCogen systems.
Risk Assessment Framework for
High-Pressure Bagasse
Cogeneration in Pakistan
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Component 3:
Development of a Conducive
Regulatory Regime
Activities• Establishment of Multi-stakeholder platform for bagasse based
power systems
• Orientation of NEPRA on regional Best Practices of tariff
determination for bagasse power projects, especially India,
through regional stakeholder consultations
• Development of toolkit for swift tariff determination and
approval for bagasse based projects
• Conducting Multi-stakeholder consultations on the adoption of a
New Power Purchase Policy (i.e. Upfront Tariff)
Outputs• Improved process for tariff determinations
• Improved policy environment for bagasse based cogeneration
projects
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen-Pak Project organized the 1st Phase of Capacity
Building Program related to Tariff Models and Determination for
NEPRA official from 7th September 2015 to 11th September 2015
in NEPRA Tower Islamabad. Training was provided by the
experienced consultants from TERI, India.
Development of a Conducive
Regulatory Regime
Training of NEPRA
Professionals
Certificate Distribution to
NEPRA Officials
NEPRA Officials during Training
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen-Pak organized two workshops, one on Regulatory
Framework and another on Up-front Tariff for Bagasse based HP
Cogeneration Plants in Sugar Mills in Pakistan.
• The first Workshop was arranged on 5th January 2016 in Lahore
and 2nd workshop was conducted on 12th January 2016 in
Karachi.
Workshops on Regulatory
Framework and Upfront Tariff
Workshop at Lahore Workshop at KarachiProject Team Lead
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• Working Paper has been prepared on Increased uptake of HPC
Technology by the Sugar Sector in Pakistan.
• Working paper highlights barriers in the uptake of HPC
Technology. Barriers determined through consultation meetings
carried out with key stakeholders.
• The Working Paper paper was shared with the Stakeholders in
a round table conference at Serena Hotel, Islamabad on 3rd May
2016.
Working Paper for
Accelerated Uptake of HPC
CEO AEDB Addressing meeting participants Participants of the Meeting Project Director addressing meeting participants
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• HP Cogen-Pak Project organized the 2nd Phase of Capacity
Building Program on Power Generation, Transmission and
Regulatory Issues for NEPRA official from 25th July 2016 to 5th
August 2016 at Marriott Hotel, Islamabad. Training was
provided by the experienced consultants from TERI, India.
Development of a Conducive
Regulatory Regime
Certificate Distribution to
NEPRA Officials
Training of NEPRA Officials
Phase IIGroup Photo of NEPRA
Training Phase II
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
• 10 Detailed Feasibility Study Reports
• 50 Pre Feasibility Study Report
• 10 CDM Project Design Documents
• 5 Technology providers Capacity building
• Capacity Building of more than 120 Sugar Mills Professionals on HighPressure Cogeneration System
• GAP Analysis to see the existing impediments in the Access to Finance forthe majority of Sugar Mills in Pakistan
• Risk Assessment Framework for High-Pressure Bagasse Cogeneration inPakistan
• Dissemination of SBP Revised RE Policy
• Training on Regulatory Framework and another on Up-front Tarifffor Bagasse based HP Cogeneration Plants in Sugar Mills inPakistan.
• NEPRA official’s Capacity building of Tariff Department
• NEPRA official’s Capacity building of Technical Department
• Developed working Paper for Accelerated Uptake of HPC in SugarSector of Pakistan
Outcome of the Project
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Current Status of HP Cogen-
Pak Associated Projects
Sr. No Sugar Mills Status Support by HP Cogen-Pak
1 Habib Sugar Mills Limited Generation License Pre-Feasibility Study
2 Bahawalpur Energy Limited (BPREL) Up-front Tariff Awarded Pre-Feasibility Study
3 Faran Power Limited Generation License Detailed Feasibility Study
4 Hunza Power (Private) Limited (HPPL) Up-front Tariff Awarded Pre-Feasibility Study
5 Indus Energy Limited Generation License Pre-Feasibility Study
6 Ittefaq Power Limited (ITFQPL) Up-front Tariff Awarded Pre-Feasibility Study
7 Kashmir Power (Pvt.) Limited Up-front Tariff Awarded Pre-Feasibility Study
8 Mehran Energy Limited (MEL) Generation License Detailed Feasibility Study
9 Mirpurkhas Energy (Pvt.) Limited Generation License Detailed Feasibility Study
10 Shahtaj Sugar Mills Limited Up-front Tariff Awarded Detailed Feasibility Study
11 Sheikhoo Power (Private) Limited (SPPL) Generation License Pre-Feasibility Study
12 Tay Powergen (Pvt.) Limited Generation License Detailed Feasibility Study
13 The Thal Industries (Corp.) Limited (Chiniot) Generation License Detailed Feasibility Study
EUROPEAN UNION
High Pressure Cogeneration for Sugar Sector in Pakistan
Thank You for Your Kind Attention