«Paramonga» CDM Bagasse Boiler Project

Agroindustrial Paramonga S.A. AIPSA, is on of the largest sugar company in Peru, producing approximately 110 thousand metric tonnes of sugar annually, which represents an 11% share of the total national sugar production. The main objective of the CDM Project is to generate the financial resources necessary to change the energy generation system of Agro Industria Peruana S.A. – AIPSA, from the actual residual fuel oil based energy generation system, to a new sugar cane bagasse energy system. The project will replace the existing boilers with a new bagasse one, displacing the use of residual fuel oil with renewable energy and zero net greenhouse gas emissions. The project activity conforms to the requirements for a small scale project because it will utilize bagasse boiler with an installed capacity of 13.6 MWth, according to the following specifications of the manufacturer of the equipment.

Baseline Scenario

Which emissions are the proposed Clean Development Mechanism CDM project displacing?
The project will substitute two boilers which consume primarily residual fuel oil, complemented by residual pith and bagasse; with one new boiler that uses only bagasse and pith. In this way, a fossil fuel will be displaced by renewable fuels; therefore the net GHG emissions associated with the fossil fuel burning will be eliminated.
The greenhouse gas emissions from fuel consumption of the existing petroleum boilers that would have been used in the absence of the CDM activity for generating thermal energy to the AIPSA sugar processing plant would have been net 873,394 tCO2e during the crediting period.
What would the future look like without the proposed CDM project?
The new boiler will produce steam for use in the sugar production process that would otherwise be generated by residual fuel oil, technically Bunker Fuels Nº 6 and Nº 500.
What would the estimated total greenhouse gas (GHG) reduction be with the project?
The use of bagasse will allow the reduction of around 87,000 tCO2e annually.

Current Status

Earliest project start date
April, 2006
Estimate of time required before becoming operational
One year
What is the project lifetime?
30 years
Current status or phase of the project eg: which of the following phases have been completed:
• The feasibility study is finished
• The environmental impact studies is finished
• The Project was approved by Designated National Authority on CDM
• The project has a Project Design Document submitted to UNFCCC

Estimated Emission Reductions

Annual: an average of 87,339 tCO2e

• Up to and including 2012: 611,373 tCO2e
• Up to a period of 10 years: 873,394 tCO2e
• Up to a period of 7 years: 611,373 tCO2e
• Up to a period of 14 years: 1,222,746 tCO2e

Project Benefits

• The project will contribute to sustainable development because it will displace a fossil fuel system with a biomass based renewable energy system, generating benefits not only by reducing greenhouses gases, but by also reducing other local air pollutants and environmental impacts associated with the burning od residual fuel oil which have deteriorated the local environment.
• The current pollution problems will be replaced by vapour and reduced particulate emissions from the controlled burning of bagasse in the new boiler, with includes a high efficiency wet scrubber.
• The project will contribute significantly to reducing global warming by displacing 873,394 tCO2e during 10 years.

Project Participant and Financing

Total project cost estimate:
• Total project costs: US$ 5,369,000

Sources of finance to be sought or already identified:
• Equity: US$ 869,000
• Debt: US$ 4,500,000
• Carbon finance contribution sought.

Contact Information: