Biomass/Waste-to-Energy (BM/WTE) is a recognised and reliable alternative source of energy; technologies have been developed to produce clean energy through wastes in specially designed power plants, with pollution control equipment.
Depending upon the composition of BM/WTE material, plants can be designed with the capacities of processing 1-1500 tons/day of Hospital Waste, Municipal Solid Waste/Waste Water, Industrial Effluent, Industrial Wastes, Mixed Waste plus tires, Mixed Waste Plus Dried Sewage Sludge, Crop Residue, etc. Rice Husk, Cotton Stalk, Jute Waste, Bagasse, Livestock Manure and other organic waste can also be used for power generation and high grade organic fertiliser production.
Government's Vision Changes in life pattern and growing urbanisation have increased generation of waste material menifold, causing a potential threat to the environment. The Government of Pakistan (GoP) with a vision to utlize the BM/WTE potential for electricity generation, has entrusted Alternative Energy Development Board (AEDB) to facilitate public and private sector organizations to set up BM/WTE projects in Pakistan through one window facility/operation. Created for development of alternative/renewable energy resources, AEDB has devised a national strategy for utilisation of BM/WTE potential in the country, which is being implemented with the support of provincial, state and district governments and other stakeholders.
Major Achievements
As a result of the policies of the government and continued efforts of AEDB, a number of BM/WTE based projects have started; a few among them have successfully been completed and otners are in pipeline. Hi-MOiz Industries Ltd, D. I. Khan has set up a bagasse based 27 MW Power generation plant; 12MW of the electricity to meet its own requirement, and up to 15MW is sent to national grid; Power Purchase Agreement (PPA) has already been signed with PESCO last year. Shakarganj Sugar Mills (SSM) has signed PPA for round¬the-year supply of 08MW of Electricity/day;
SSM is the first in the sugar sector to have installed a powerhouse to produce electricity from molasses. Cement industry is being fully facilitated to set up Refuse Derived Fuel (RDF) plants by utilizing Municipal Solid Waste that would replace costly imported coal; AEDB has issued provisional Lol to M/s D.G. Khan Cement for conversion of MSW generated at Faisalabad to RDF.
BM/WTE Investment Opportunities in Pakistan
-- More than 50,000 metric tons of municipal solid waste is produced every day in Pakistan, which can be converted to electricity.
-- The local sugar industry can produce 300MW of renewable energy by using molasses to make biogas for firing generation plants, and can also generate 3000 MW from Bagasse.
-- In cement industry, costly imported coal can be replaced with Refuse Derived Fuel (RDF).
-- Thousands of tons of cow dung in major villages can produce gas or generate electricity.
Incentives for Private Sector
Permission for power generation companies to issue corporate registered bonds.
Permission to issue shares at discounted prices to enable venture capitalists to be provided higher rates of return pro portionate to the risk.
Permission for foreign banks to underwrite the issue of shares and bonds by private power companies (IPPs) to the extent allowed under the laws of Pakistan.
Non-residents allowed purchasing securities issued by Pakistani companies without the State Bank of Pakistan's permission, subject to prescribed rules and regulations.
-- Independent rating agencies available in Pakistan to facilitate investors in making informed decisions about the risk and profitability of the project company's bonds/TFCs
-- No customs duty or sale tax machinery equipment and spares (Including construction machinery, equipment and specialised vehicles imported on temporary basis) meant for the initial installation or for balancing, modernisation, maintenance, replacement, or expansion after commissioning of projects for power generation utilizing renewable energy resources subject to fulfilment of conditions under the relevant SRO;
-- Exemption from income tax, including turnover rate tax and withholding tax on imports;
-- Repatriation of equity along with dividends freely allowed, subject to rules and regulations prescribed by the State Bank of Pakistan;
-- Parties may raise local and foreign finance in accordance with regulations applicable to industry in general. GoP approval may be required in accordance with such regulations;
-- Non-Muslims and non-residents shall be exempted from payment of Zakat on dividends paid by the company;
-- Carbon Credits (for qualifying RE power projects eligible for financing under the Clean Development Mechanism shall be encouraged to register for Certified Emission Reduction Credits with the CDM Executive Board)