Pursuant to decision of the Economic
Coordination Committee of the Cabinet (the ECC) in Case No.
ECC-169/13/2007 dated November 13, 2007 approved "National
Policy for Power Co-Generation by Sugar Industry" (the
Co-Gen Policy). The Salient Features of the Co-Gen Policy are
available to the Independent Power Plants under Policy for Power
Generation Projects 2002 would be available to the Power
Co-Generation units of Sugar Mills.
generated by the Sugar Industry will be purchased by NTDC or
DISCO concerned at agreed/negotiated and competitive rates to be
approved by NEPRA. Power Sale / Purchase Agreements, valid
during the life of the Power Co-Generation units, will be signed
with Sugar Mills on the lines of the Agreements signed with the
imported/local coal will be consumed as per requirement of the
plant without any limitation of inter- changeability.
co-generation power projects will be developed on Fast Track
Basis and there will be no requirement of pre-qualification,
feasibility study and Letter of Interest (LOl) by PPIB. The
Sugar Industry will be issued Letter of Support (LOS) by PPIB
after upfront tariff has been determined by the NEPRA.
mills selected for power Co-Generation will be required to set
up the plant on fast track basis but not later than
36 months of
issuance of Letter of Support (LOS) since basic infrastructure
is already in place.
It will be the
responsibility of the Sugar Mills to make all other arrangement
like bank financing, purchase of land, procurement of machinery
ECC further decided that:‑
Such power co‑generation plants/units, will not be
treated as part of sugar industry, but as a separate entity for
The existing tariff rules and guidelines for the IPPs
would be applicable for such power generation plants/units.
Revised Guidelines for Processing Unsolicited Raw Site
Co‑Generation Power Project Proposals from Sugar Mills
Pursuant to the aforesaid ECC decision,
following procedure shall be followed for establishing
Co-Generation Power Projects by Sugar Mills.
Mills Association (PSMA) shall approach NEPRA for tariff for
Bagasse based Co-Generation Power Projects.
Based on the
tariff worked out by NEPRA on PSMA's recommendations /
feasibility study, the interested parties will register with
PPIB after depositing the requisite fees, and submit a detailed
proposal on the proposed project to PPIB.
sponsor for each proposed project must include an owner of a
sugar mill. The project proposal must include documentary
evidence to this effect.
acknowledge the interest / proposal of sponsors and advise them
to approach NEPRA for issuance of Generation License and Tariff
of Generation License and determination of Tariff for specific
project by NEPRA, the sponsors would communicate acceptance of
the Tariff to PPIB.
advise the Sponsors to submit Performance Guarantee (PG) @ US$
5,000 per MW and Processing / Legal Fee of US$ 100,000/-
of PG, Processing / Legal Fee and Milestones for project
processing by PPIB, the Letter of Support (LOS) will be issued
to the sponsors.
will be required to achieve Financial Close within
09 months from
the date of issuance of LOS
Documents like IA, PPA, FSA. Loan Documents etc. will then be
finalized between respective parties.
will have to set-up the project within
after issuance of LOS.
Except as otherwise stated, the
provisions of Policy for Power Generation Projects 2002, as
amended from time to time, will be followed.