Criteria for sugar mills power co-generation laid

The government has decided not to include any sugar mill, with crushing capacity less than 7000 tons, in the 'power co-generation plan'.
"Sugar mills proposing co-generation power project should be self-sufficient in bagasse during the winter months with plants having in-house availability of required quantity of input," the guidelines and selection criteria of sugar mills for power co-generation say, a copy of which was made available 'exclusively' to Business Recorder.
The document suggests that cases of sugar mills meeting the laid down criteria would be processed on first-come-first-served basis, but their net/saleable output should be above 50 MW (excluding self-consumption of electricity.
The proposals submitted by the sponsor must contain details including Statement of Qualification (SoQ) as stipulated in the Power Policy 2002, as amended from time to time, the document says.
Sources said that it had also been decided that sugar mills located close to the gas pipeline/grid station would be given preference.
The financial and operational performance of the sugar mills should be in line with the SoQs to be submitted to the Private Power Infrastructure Board (PPIB), sources added.
Any sponsor wishing to undertake an unsolicited raw site co-generation power project of above 50 MW must register with the PPIB on payment of $10000 fee and purchase the pre-qualification documents against payment of $1,000.00.
The approved project would be issued Letter of Interest (LoI) after submission of the prescribed bank guarantee as per Power Policy 2002 and fulfilling the requirements to conduct feasibility study within four months.
After completion and approval of the feasibility study, the sponsor would be required to negotiate tariff with National Electric Power Regulatory Authority (Nepra), in co-ordination with the power purchaser, within two months.
The PPIB would issue Letter of Support (LoS) to the successful sponsor after fulfilment of the Power Policy requirements, to achieve financial closing within three months and start construction.
The sponsors would be given 12-18 months to complete the project after issuance of LoS.
Primarily, the cost of laying transmission line would be borne by the respective sugar mills. However, the cost would be reimbursed to the mills by National Transmission and Dispatch Company (NTDC) in due course of time under a separate and independent agreement which would not constitute part of the security package.
The power purchaser would not share it from any means. Gas allocation to the approved mills would be made available in accordance with 'Natural Gas Allocation and Management Policy 2005' to dual fired combined power cycle plants for the contract period with appropriate safeguards to protect interest of the gas supplier against non-availability or curtailment of gas supplies for events beyond reasonable control.