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NAMA for Sugar Mills in Mexico

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NAMA for Sugar Mills in Mexico

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Amazon
Area: 5888268 km2
Countries:
Brazil; Peru; Suriname; France; Colombia; Guyana; Bolivia; Venezuela; Ecuador
Cities:
Santa Cruz; Manaus; La Paz
PFAF ID:
HydroBasin Level:
Baseline Water Stress:
Water Quality Stress:
Sanitation Access Stress:
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Quick Info

Countries: Mexico
Basins: Gulf of Mexico (458) (Rio Verde)
Project SDGs:
Includes Sustainable Development Goals from the project and its locations.
Water Use Efficiency (SDG 6.4)
Protect and Restore Ecosystems (SDG 6.6)
Stakeholder Participation (SDG 6.b)
Sustainable Production (SDG 12.4)
Project Tags:
Includes tags from the project and its locations.
Sustainable Withdrawals
Progress to Date: NA Creation of a governance model for public-private collaboration
Services Needed: No services needed/offered
Desired Partners: Business
Business Association
Government
Language: English
Start & End Dates: Oct. 01, 2016  »  Ongoing
Project Website: unepdtu.org/project/nama-for-sugar-mills-in-mexico
Contextual Condition(s): PHYSICAL: Ecosystem vulnerability or degradation
Additional Benefits: Basin stakeholder mapping, Long-term partnership(s) created
Beneficiaries: Ecosystems, Other utilities, Local communities / domestic users
Planning & Implementation Time: More than 3 years
Financial Resources: More than $500,000 USD
Primary Funding Source: pool
Project Challenges: PARTICIPANTS: Poor participant track record or reputation, PARTICIPANTS: Unaligned intent and incentives
Project Source: User
Profile Completion: 90%

Project Overview

Setting up a financing model to promote investment in efficient co-generation plants at the sugar mills, allowing the export of excess electricity to the national electricity grid.

Sugar mills in Mexico produce more than 15 million tons of bagasse every year. While this by-product of sugar production is used as fuel in sugar mills, half of it is usually wasted through inefficient incineration. This means that its power production potential of up to 3000 GWh/year is lost.

UNE…

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Setting up a financing model to promote investment in efficient co-generation plants at the sugar mills, allowing the export of excess electricity to the national electricity grid.

Sugar mills in Mexico produce more than 15 million tons of bagasse every year. While this by-product of sugar production is used as fuel in sugar mills, half of it is usually wasted through inefficient incineration. This means that its power production potential of up to 3000 GWh/year is lost.

UNEP DTU Partnership has developed a financial structure with a central SPV (special Purpose Vehicle) to finance, construct and operate the connection of Mexican sugar mills to the national grid. This way excess power production from more efficent use of bagasse can be sold back to the grid, maing the business case for efficient inceneration while lowering ghg emissions.
The SPV works on the basis of a rotating, non-profit financial model that improves not only the business case for the sugar mills, but eases all grid connection processes and procedures. At the same time, the SPV may engage in power trading on behalf of the sugar mills in order to improve their revenues from participating in the newly reformed electricity market.

The NAMA for sugar mills comes from the bilateral energy and climate change cooperation program between Mexico and Denmark. The Danish Energy Agency together with UNEP DTU Partnership and the implementing partners in Mexico – the Ministry of Energy and the Sugar Industry Chamber – developed a winning concept for the NAMA Facility’s Detailed Preparation Phase.
The facility has financed the final conceptual design building solid business cases for a number of sugar mills and securing investment commitments from a number of sugar mills for their own plant upgrades.

Basin and/or Contextual Conditions: PHYSICAL: Ecosystem vulnerability or degradation
Project Benefits: Basin stakeholder mapping, Long-term partnership(s) created
Indirect or Direct Beneficiaries: Ecosystems, Other utilities, Local communities / domestic users
Months & Implementing: More than 3 years
Financial Resources: More than $500,000 USD
Primary Funding Source: Pool funding (i.e., joint funding of several partners)
Challenges: PARTICIPANTS: Poor participant track record or reputation, PARTICIPANTS: Unaligned intent and incentives

Project Narrative

The NAMA for sugar mills comes from the bilateral energy and climate change cooperation program between Mexico and Denmark. The Danish Energy Agency together with UNEP DTU Partnership and the implementing partners in Mexico – the Ministry of Energy and the Sugar Industry Chamber – developed a winning concept for the NAMA Facility’s Detailed Preparation Phase. The facility has financed the final conceptual design building solid business cases for a number of sugar mills and securing investment commitments from a number of sugar mills for their own plant upgrades. In the medium term alone, the NAMA is expected to reduce about 1 million tCO2e/year. This project contributes to the following Sustainable Development Goals:

Partner Organizations


International Climate Initiative (IKI) is one of the most important instruments of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) for the international financing of climate change mitigation and biodiversity. IKI operates within the framework … Learn More


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