Karachi: In a significant development for Shahtaj Sugar Mills Limited (SSML), the company has achieved a major milestone with the signing of the Implementation Agreement with the Alternative Energy Development Board (AEDB) in 2023 for its 32 MW bagasse-based co-generation power project. This marks a crucial step forward in a project that has faced a series of regulatory hurdles and adjustments since its inception under the Government of Pakistan's "Power Cogeneration 2013 Bagasse and Biomass" framework announced in 2013.

SSML made the decision to pursue the installation of a power plant under this framework in 2014, subsequently receiving a Letter of Intent from the AEDB the same year. This set the stage for a series of regulatory approvals and revisions, including the issuance of a Generation License by the National Electric Power Regulatory Authority (NEPRA) in 2016, and the approval of an Upfront Tariff for SSML in 2017.

However, the project faced a setback in 2018 when the Cabinet Committee on Energy (CCOE) disallowed the project, prompting SSML to file a writ petition before the Islamabad High Court. The decision was later rectified by the Council of Common Interest (CCI) in 2020, allowing the project to move forward. According to information available from the Pakistan Stock Exchange (PSX), NEPRA revised the Upfront Tariff in 2022, followed by the notification of the tariff in the National Gazette of Pakistan and the signing of an Energy Purchase Agreement with the Central Power Purchasing Agency (CPPA).

The financial closure of the project was officially declared in 2023, paving the way for successful trials as per the Energy Purchase Agreement, which are anticipated to be completed by 2024 prior to the energization and synchronization of the complex.

In terms of financial performance, SSML's sales revenue has shown fluctuations over the past years. The company reported sales revenues of 9.48 billion in 2020, which increased to 10.00 billion in 2021. However, there was a decline in subsequent years, with 9.00 billion in 2022 and 8.82 billion in 2023, marking a 6.9% decrease compared to the previous year. The projected revenue for 2024 is 6.31 billion. Despite these challenges, the progress in the power project is expected to positively impact the company's long-term financial stability and market position in the energy sector.