High Pressure Cogeneration for Sugar Sector in Pakistan · 2018-12-10 · High Pressure Cogeneration for Sugar Sector in Pakistan • HP Cogen-Pak organized the specialized O&M Training

EUROPEAN UNION

High Pressure Cogeneration for Sugar Sector in Pakistan

High Pressure Cogeneration for

Sugar Sector in Pakistan

EUROPEAN UNION


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


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


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


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

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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

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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

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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

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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


• 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

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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.

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Development of Pre-feasibility Studies for

Sugar Industries


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

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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

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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

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• 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


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• 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.


Meeting with Pak Brunei Investment,

Karachi. Meeting with Meezan Bank, Karachi Meeting with Habib Metropolitan Bank,

Karachi.

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• 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

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• 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

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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


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• 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


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


• 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


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


• 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.


Regulatory Regime

Training of NEPRA

Professionals

Certificate Distribution to

NEPRA Officials

NEPRA Officials during Training

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• 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

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• 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

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• 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.


Regulatory Regime

Certificate Distribution to

NEPRA Officials

Training of NEPRA Officials

Phase IIGroup Photo of NEPRA

Training Phase II

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• 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

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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

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Thank You for Your Kind Attention