Pepco and Almoiz Sugar signs Power Purchase Agreement

Lahore: The Pakistan Electric Power Company (Pepco) and the Almoiz Sugar Industry, in Dera Ismail Khan, have signed a power purchase agreement (PPA) for 15MW power being offered by the latter.

The Pepco chief executive officer and his Almoiz counterpart signed the agreement on Saturday at the two powerhouses' headquarters in the presence of Water and Power Secretary Muhammad Ismail Qureshi and Pepco and Water and Power Development officials.

Pepco, as part of its strategy to bridge the gap between supply and demand of electricity and to promote alternative energy generation sources, has offered an attractive tariff for generation of power through baggage, which is the waste product of sugar mills. The new benchmark set by Pepco is Rs 4.88 per kWh to sugar mills. As part of this strategy, the agreement finalised the first contract with the sugar industry and Pepco.

Pepco Managing Director Munawar Baseer Ahmad has said he hopes all available surplus capacity with the sugar industry will be availed after the agreement. In his remarks after the contract signing, he said that power generation through baggage carried several advantages, like clean development mechanism, control on greenhouse gases and adherence to the Kyoto Protocol. He also said the option of obtaining carbon credit was also being explored.

'The Almoiz, bagasse-based power plant, will also help in reducing our increasing dependence on imported fuel oil and fast depleting locally available gas resources,' said Baseer.

The agreement under reference is likely to bring out the dormant capacity along with induction of further green field projects. He expressed hope that the feasibility study of all future sugar industry in Pakistan would include co-generation from bagasse.

He said it was expected that this first landmark project would herald several similar plants in the sugar industry. 'Pakistan will follow suit with other Asian developing countries where bagasse-based generation already forms 5 percent to 6 percent of their energy resources. To quote an example, India has a vision of approaching 9,000 MWs of generation through baggage by the year 2017,' he added. Almoiz Executive Director Nauman Ahmad Khan hailed the contract as a bold initiative taken by Pepco.