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Draft Final Report

PROMOTION OF RENEWABLE ENERGY,


ENERGY EFFICIENCY AND GREENHOUSE GAS ABATEMENT
(PREGA)

Pakistan

Waste to Energy and Fertiliser


Landhi Cattle Colony
A Pre-Feasibility Study Report1

July 2006

Prepared by the Anthony Noel Woods and Beverly Ann McClean of Empower Consultants
Limited, New Zealand.

Table of Contents
List of Acronyms ........................................................................................................................ 4
1
Executive Summary............................................................................................................ 5
2
Map of Project Location .................................................................................................. 10
3
Introduction...................................................................................................................... 13
4
Background ...................................................................................................................... 14
4.1 Sectoral Context......................................................................................................... 14
4.1.1 Environment Sector ....................................................................................... 14
4.1.2 Energy Sector................................................................................................. 15
4.1.3 Fertiliser Sector.............................................................................................. 20
4.2 Sectoral Opportunities and Constraints ..................................................................... 21
4.2.1 Energy Sector Opportunities and Issues ........................................................ 21
4.2.2 Fertiliser Sector Opportunities....................................................................... 25
4.2.3 Environment Sector Issues and Opportunities............................................... 28
4.3 Project Contribution to Sustainable Development..................................................... 32
4.3.1 Employment................................................................................................... 32
4.3.2 Gender Impacts .............................................................................................. 32
4.3.3 Environmental Improvement ......................................................................... 32
4.3.4 Improvements in Handling Abattoir Waste ................................................... 33
4.3.5 Fresh Water Impacts ...................................................................................... 34
4.3.6 Impacts on Power Use ................................................................................... 34
4.3.7 Impacts on the Marine Environment.............................................................. 34
4.3.8 Green Spaces.................................................................................................. 34
4.3.9 Downstream Potential for Use of Liquid Waste ............................................ 34
4.3.10 Return of Benefits to the Community............................................................ 35
4.3.11 Greater Use of Renewable Fuels.................................................................... 35
4.3.12 Reduction in Reliance on Imports.................................................................. 35
4.3.13 Contribution Towards Renewable Energy or Energy Efficiency Targets ..... 37
4.3.14 Alleviation of Electricity Supply Constraints ................................................ 38
4.3.15 Cost Reduction............................................................................................... 38
4.4 Government Policies and Strategies in the Power Sector.......................................... 38
4.5 Regulation and Enforcement Issues........................................................................... 39
4.6 Policy Coherence between ADB and Government of Pakistan Objectives............... 40
4.6.1 Implementation Arrangements for the Pilot Plant ......................................... 40
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The Proposed Project ...................................................................................................... 41
5.1 Stakeholders............................................................................................................... 41
5.2 Alignment with ADB and other ODA Funding and Programmes............................. 44
5.3 Goal, Objectives and Outputs of the Pilot Project ..................................................... 44
5.4 Poverty Reduction and Millennium Development Goal Impacts .............................. 45
5.5 Technology Transfer.................................................................................................. 46
5.6 Core Business of the Proposed Project Partners ........................................................ 46
5.7 Products and Services to be Generated by the Project............................................... 47

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6
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Project Implementation Plan ........................................................................................... 48


Contribution to Sustainable Development ....................................................................... 48
Project Baseline and GHG Abatement Calculation ........................................................ 49
8.1 Baseline Scenario....................................................................................................... 49
8.2 Additionality .............................................................................................................. 50
8.3 Identification of Plausible Scenarios ......................................................................... 51
8.4 Flowchart of the Current Delivery System ................................................................ 52
8.3 Status, Adequacy and Operation Modes of the Baseline........................................... 55
8.4 Baseline Methodology and Calculation of Baseline Emissions ................................ 55
8.5 Calculation of Total Project GHG Emissions............................................................ 56
8.6 Net Emission Reduction ............................................................................................ 56
9
GHG Emission Reduction Monitoring and Verification.................................................. 57
9.1 Identification of Data Needs and Data Quality ......................................................... 57
9.2 Methodology Used for Data Collection and Monitoring........................................... 58
9.3 Estimates of Costs for Monitoring and Verification.................................................. 59
10 Financial Analysis of the Project..................................................................................... 59
10.1 Electricity Production .................................................................................... 59
10.2 Fertiliser Production................................................................................................... 60
10.3 Carbon Credit Calculations........................................................................................ 61
10.4 Financial Summary Table .......................................................................................... 67
10.5 Estimation of Overall Cost Estimates ........................................................................ 67
10.6 Project Financial Analyses......................................................................................... 68
10.7 Financing Plan ............................................................................................................ 68
11 Economic Impacts............................................................................................................ 68
11.1 Statement of Poverty Reduction Impacts................................................................... 69
11.2 Statement of Social, Gender and Environment Impacts ........................................... 69
12 Stakeholders Comments.................................................................................................. 70
13 Key factors Impacting Project & Baseline Emissions ..................................................... 71
13.1 Project Uncertainties.................................................................................................. 72
14 Conclusions and Recommendations ................................................................................ 73
References ................................................................................................................................ 74

List of Acronyms
ADB
Btu
CBO
CDGK
CDM
CNG
ECL
EDO
EIA
EPA
FDI
GDP
GEF
HDIP
HRT
IDP
IEE
JFPR
KESC
KMC
MCF
MTOE
MW
Nazim
NCS
NEPRA
NFDC
NGO
NZAID
OGRA
PARC
PCRET
PCSIR
PPIB
PREGA
SEEICCK
SNGPL
SSGC
TCF
TOE
UAE
VOC
WAPDA

Asian Development Bank


British Thermal Units
Community Based Organisation
City District Government of Karachi, formerly Karachi Municipal Corporation
Clean Development Mechanism
Compressed Natural Gas
Empower Consultants Limited
Executive District Officer
Environmental Impact Assessment
Environmental Protection Agency
Foreign Direct Investment
Gross Domestic Product
Global Environment Facility
Hydrocarbon Development Institute of Pakistan
Hydraulic Retention Time
Internally Displaced Person
Initial Environmental Examination
Japan Fund for Poverty Reduction
Karachi Electricity Supply Company
Karachi Municipal Corporation, now City District Government of Karachi
Millions of cubic feet
Million tonnes of oil equivalent
Megawatt
Elected local body leader, equivalent to Mayor
National Conservation Strategy
National Electric Power Regulatory Authority
National Fertiliser Development Corporation
Non Governmental Organisation
New Zealand Agency for International Development
Oil and Gas Regulatory Authority
Pakistan Agricultural Research Council
Pakistan Council for Renewable Energy Technologies
Pakistan Council for Scientific and Industrial Research
Private Power and Infrastructure Board
Program for Renewable Energy, Energy Efficiency and Greenhouse Gas Abatement
Society for Economic and Environmental Improvement of the Cattle Colonies of
Karachi
Sui Northern Gas Pipelines Limited
Sui Southern Gas Company
Trillions of cubic feet
Tonnes of oil equivalent
United Arab Emirates
Volatile Organic Compounds
Water and Power Development Authority

Executive Summary

1.
This study addresses pre-feasibility of a waste-to-energy-and-fertiliser proposal at Landhi
Cattle Colony, Karachi, Pakistan.
2.
The project site is 20 km from the centre of Karachi, adjacent to Korangi, an industrial
processing zone, and close to the coastal mangrove swamps on the Malir River in the Irrawaddy
River delta.
3.
Landhi and Bin Qasim towns are home to over a million people, and 400,000 heads of
cattle. The area is economically depressed; one third to half the population lives under the
poverty line. Many are economic migrants from other parts of Pakistan. The industrial zone and
cattle colonies place the area under severe environmental stress; there is no waste disposal plan
for the 8,000 tonnes of cattle waste generated daily. Most of this is flushed into open drains, and
disgorged on the nearby coast. In 1998, farmer groups requested assistance from international
consultants from New Zealand to address the problem of cattle waste. After some years of
institutional change, stakeholder consultations and quest for funding, the New Zealand Agency
funded a demonstration waste-to-energy-and fertiliser project in 2005 for International
Development, endorsed by the Alternative Energy Development Board (AEDB) of the
Government of Pakistan. At the time of writing, the demonstration planning is proceeding with
participation of local partners, and local and central government stakeholder support.
Commissioning is expected in late 2006.
4.

This project has relevance to the environment, energy, and fertiliser sectors.

Pakistan is signatory to numerous international environmental conventions, including the Kyoto


Protocol. Environmental legislation in Pakistan is relatively recent, and the sector is still weak,
lacking comprehensive standards, means of verification, incentives for environmentally benign
options, and ability to successfully prosecute violators. Establishment in February 2006 of a
Designated National Authority (DNA) and a Clean Development Mechanism (CDM) Cell in the
Ministry of Environment offer the country the possibility of benefit from CDM mechanisms.
Energy supply is constrained, while increases in demand have continued to outstrip supply by
more than 6% per annum over the past five years. Indigenous oil reserves may last ten years.
Gas reserves from currently developed sites have a life expectancy of around 25 years. Although
coal is abundant, the quality is poor. Renewable energy has great potential, but development is
constrained by high investment costs and lack of a suitable conducive policy and regulatory
environment.
Fertiliser is an extremely important input to Pakistans still predominantly agrarian economy.
38% of fertiliser is imported. Use of natural gas for fertiliser production is rising steadily,
against a scenario of dwindling gas reserves. Use of an organic-inorganic fertiliser mix is
encouraged, since it produces better yields and improves soil condition.
The project offers opportunities in the energy sector to alleviate shortages of either power
(around 24 MW) or equivalent CNG in the vicinity of the cattle colonies. There is scope in the

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rest of the country for replication of the demonstration scale project (around 100 kW), and two or
three other sites, which may offer one quarter the potential of the up scaled proposed Landhi
plant. Sale of small quantities of power to the grid faces institutional difficulties, and second-tier
supply, which requires a No Objection Certificate (NOC) from the concessionaire for the area,
is sometimes economically unattractive due to the local consumer profile.
Tariffs have not yet been set for electricity generated from biogas. The Landhi project would
need to establish a precedent for this.
Power is subsidised to lifeline block consumers. With institutional strengthening assistance from
ADB, capacity and performance within the power sector has improved. There is however no
experience yet with running biogas-fuelled generation facilities, and technical capacity for this
needs to be built.
There is no current commercial market for dung-based fertiliser. Great potential exists to
develop a market for fertiliser/soil conditioner from the biogas plant slurry for the bulk industrial
crop consumer market. Research indicates that yields can be improved using a specified
organic-inorganic fertiliser mix. A vestigial boutique market for city garden consumers is
already in operation in Karachi. It is much more lucrative on a per kg basis than the bulk
commercial fertiliser market, but would require more marketing effort to develop.
Opportunities in the environment sector are wide, since little environmental control is currently
exercised. Effective solid waste management is an urgent need, as is sewage and sanitation,
especially in the large cities. The Landhi project may provide a model that can be extended to
include compostable city and human wastes. Enforcement in the sector is weak because of
incomplete standards, paucity of certified laboratories and monitoring inspectors, and lack of
alternatives to infraction. However, some infringement notices have been issued and
successfully prosecuted in the past two or three years, which is a promising start to effective
enforcement.
The Landhi project could make useful contributions to sustainable development in generating
employment, some targeted to women. It will effect environmental improvement. In addition to
utilising the cattle waste, the biodigester can accept residual abattoir waste. Compared with
current requirements for flushing waste to the coast, the project will save both water and power.
It will remove most cattle waste from the marine environment, where mangroves and marine life
are dying due to dumping of industrial and organic waste. The liquid effluent from the
biodigester can be used to green public spaces.
There is no conflict in this project with government strategies or policies, though there is some
internal incoherence in existing policies and regulations.
If the energy is used for electricity generation, the project will set a precedent in establishing a
tariff for biogas-based generation.
ADB and Government of Pakistan policies in the relevant sectors align well with each other, and
with the project.

5.
The project process takes dung, mixes it with water to slurry and digests it anaerobically
in a covered digester. Outputs are gas and organic fertiliser/soil conditioner. The gas may be
used directly, converted to CNG, or used to generate electricity. The remnant grey water and the
solid waste are valuable fertilisers/soil conditioners.
Stakeholders are local farmer groups and CBOs, the Karachi City District Government, utilities,
provincial authorities, and policy and regulatory authorities with interest in environment, energy,
and fertiliser. No stakeholder has identified any potentially adverse impacts.
All stakeholders share a common goal of economic and environmental improvement.
The project will have positive impacts on poverty reduction and on some Millennium
Development Goals.
A group of local NGO and business proponents is active in the promotion of the project. Their
core business is social and environmental improvement and professional engineering.
Products and services to be developed by the project are energy and organic fertiliser. Energy
may be used as biogas, scrubbed and used as methane, converted to CNG or electricity.
Biodigester residue will produce liquid and solid organic fertiliser.
6.

Project implementation is expected to proceed as follows:

July 2006: Completion of pre-feasibility study


August 2006: Construction of NZAID-funded demonstration plant commences
November 2006: Commissioning of demonstration plant
January 2007-on: Monitoring data from demonstration plant available
Mid-2007: Feasibility study may commence, followed by implementation when
investment is determined.

7.
The project will have a significant impact on the sustainable development of the Landhi
and Bin Qasim areas. The long-term and on-going dumping of massive quantities of raw dung
into the local environment renders much of the land over-nutrified and good only for dumping
yet more dung, while the waterways and coastal waters are unable to support meaningful marine
life due to the excessive biological oxygen demand of the decaying material.
Local employment and standard of living can be expected to improve as the environs are made
more inviting to productive uses and external investment.
Replication of the project is highly likely. Pakistan has multiple private and military cattle
farming lots around the country, few offering any solid waste management process. In addition,
this process can be expanded to incorporate urban solid waste management to mitigate the
environmental impact of city waste also.

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8.
Greenhouse gas reductions are certain from the project and will form a third income
stream for the project after fertiliser sales and energy sales. The collection and combustion of
methane from the present situation results in a nearly 21-fold reduction in current greenhouse gas
emissions. Presently dung is generally dumped into open land and waterways, resulting in open
release of methane as the dung rots. This project will capture and combust this methane, thus
reducing its environmental impact and generating electricity in the process, which will further
reduce fossil fuel releases elsewhere in Pakistan.
Assuming only 70% of the dung is currently dumped and composted to release methane and
carbon dioxide, the project will produce approximately 196,000 m3 of methane per day and
105,000 m3 of CO2. This equates to 1,156,000 tons of CO2 per annum.
If the dung is digested and digested with a 95% gas capture rate, total CO2 emissions would
equal 295,000 tons per annum. Allowing for reduced CO2 emissions for avoided generation
elsewhere in the Pakistan electricity grid, the final net CO2 reduction quantity would be
1,038,000 tons per annum.
In order to utilise and complete a UNFCCC-recognised methodology related to the baseline
scenario and possible reductions, additional lab testing on rates of decay in the local waterways
is necessary, as is field testing of the actual gas released from the raw dung resource. The pilot
project presently underway will clarify many of these necessary details related to the production
and mitigation of greenhouse gases from cattle dung in the Landhi area.
9.
Project monitoring is a necessary and important aspect of the project, particularly in the
pilot stage where there are process variables needing measurement and monitoring to provide
accurate design criteria for the downstream project. The monitoring of greenhouse gas emissions
will be a critical factor if the project is accepted for the sale of greenhouse gas credits. Such
monitoring will need to be done in strict accordance with UNFCCC procedures.
The monitoring of social and environmental impacts also needs to be conducted, particularly
since wider replication of the project is expected around Pakistan. Should unexpected impacts
be noted, they can then be avoided in future projects of this type.
10.
The project financial returns are split into three distinct groups. Energy sales (in this case
electricity), fertiliser sales, and carbon credits. At the rates of production described, net revenues
of US$ 11.5 million pa are expected from the sale of power. Net income from fertiliser sales is
forecast at US$ 2.1 million pa. Carbon credit income is likely, but as carbon credits are a new
commodity and the price is steadily rising over time, with some volatility in some markets, such
as the European Union internal market, as markets mature. Revenues have been predicted at
US$ 0, 3, 5 and 10 per ton of CO2 abated, respectively, giving potential net revenues of US$ 0.0,
million, US$ 3.1 million, US$ 5.2 million and US$ 10.4 million, respectively. These revenues
are assuming the 0,0 % renewable energy tax exemption applies, and assuming raw dung is
purchased from farmers at the rate of Rs 150 per ton, or 0.15 Rs per kg.

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The estimated capital cost for the project is US$ 70 million. Using the income streams identified
above, and depending on the CO2 credit rate assumed, the projects FIRR ranges from 18% to
48%.
From an investment perspective, carbon credit income is necessary to offset project risk and
form an attractive investment opportunity.
11.
Economic impacts of the project incorporate results of land and water use, plus
environmental and social impacts. Assessments of land use and preliminary results of water
measurements on existing farms show that very positive results are likely. Land in the project
area is unused, desertified, and degraded. Water is scarce and wasted in massive quantities to
flush raw effluent into the sea. Employment and incomes for local inhabitants will improve
directly as a result of employment created in the project itself, as well as indirectly through an
improved investment climate in the Landhi and Bin Qasim environs. Empirical data will be
collected during the pilot stage to quantify and evaluate these effects, thus allowing an improved
economic comparison in the feasibility stage.
12.
Feedback from stakeholders has been highly supportive of the project. Consultations
include federal government, provincial and city government representatives, as well as farmers
and community groups. Support for the project has been encountered at all levels and is a very
encouraging indicator for the widespread recognition that the dumping of massive volumes of
effluent into the environment cannot continue indefinitely. Copies of the letters of support are
available for review on request.
13.
The project is not without risk. The political situation in Pakistan is uncertain, and while
the technical process is relatively simple, if it not correctly managed, gas production can cease or
be significantly reduced. This directly impacts on gas production and sales, as well as the quality
of the fertiliser produced. Other risks relate primarily to fuel supply, being the raw dung. While
there is no mention of the cattle farms being moved or disbanded, should municipal law change
and force the cattle farmers to move, the transportation and collection costs for the dung will
increase accordingly.
14.

Recommendations:
a. That given the viable nature of the project from a financial, social and environmental
perspective, the project should proceed forward to a feasibility stage.
b. That the pilot stage funded by the New Zealand government be regarded as an
opportunity to collect and monitor the data needed to accurately assess the design and
investment criteria for the large-scale project.

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Map of Project Location

The project area is in Sindh Province on the coastal fringes of the Thar Desert, 30 kilometres east
of Karachi city. It is flat, sandy, devegetated and windswept. The meagre and heavily polluted
Korangi stream borders the colony and joins the coastal delta, which is flanked by mangrove
swamps, dying where cattle and industrial effluent is flushed out to sea. The national electricity
HV transmission grid and Sui Southern Gas Company (SSGC) pipeline cross the area.
Fig. 1: Map of Project Area and Environs

Karachi Centre
Project area
Korangi Industrial zone

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Fig. 2: Landhi Cattle Colony Aerial Photographs

Main road link

Pilot project site. See


photo below

Coast and fishing port

Karachi city CBD

Landhi cattle colony

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Landhi Cattle Colony Pilot plant site

Existing digester needing


repair

Two concrete water


storage tanks

The pilot plant location

Effluent leaching into the


ocean is clearly evident

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Introduction

Landhi Cattle Colony is located in the administrative units of Landhi and Bin Qasim townships,
close to the Korangi industrial zone some twenty kilometres east of Karachi centre. The
population of the two townships together is more than 1.2 million in almost 175,000 households.
Of these, some 2,000 are farmer households closely agglomerated in Bhains Colony. Within the
townships are clusters of internal migrants, Baloch and Pashtun from Balochistan, Punjabis,
ethnic Aryans from Bangladesh and, lately, Kashmiris from the earthquake-affected northern
areas. Young unemployed males are overrepresented in the population profile. About 50% are
poor (earnings of less than US$ 1/day). There are numerous clusters of informal katchi abadi
(squatter) dwellings in the area.
The railway line, natural gas pipeline and high voltage national transmission grid cross the area.
Physical and social infrastructure is poor; roads and markets are in deplorable condition. Water
reticulation is weak, and pressures are inadequate. Many residents sink private bores, though
this has now been prohibited to prevent further damage to the water table. There is no public
sanitation. Education is available only to middle school level, and there is no public Basic
Health Unit, though there is a veterinary hospital at which sick people sometimes seek medical
attention.
Aside from labour in the cattle farms, the main source of livelihood is work in textile, leather and
steel factories in the adjacent industrial zone. There are two farmer groups in the area, and a
number of CBOs, often organised on ethnic minority group lines, and focussed mainly on
education and employment creation, especially for women. A 2002 survey of 1,000 households
in the project area revealed the top five development priorities as employment, education, water
supply, transport, and electricity supply.
Landhi is socially and environmentally stressed, exacerbated and compounded by years of
unrestricted dumping of household, industrial and farming waste into the local environment.
Waste volumes are vast, comprising up to 8,000 tons of cattle dung per day from the farms alone.
Formerly, dung was sold to the UAE, but an outbreak of rinderpest closed this market.
In 1998, the original farmer group requested assistance from international consultants from New
Zealand for a solution to dispose of the dung and clean up the environment. Following
protracted grassroots and institutional stakeholder consultation through four years of
considerable change in the structure of local government, all stakeholder agencies agreement to
support a waste-to-energy and fertiliser project. Funding was sought from GEF. After two years
in the pipeline, and following the coming into force of the Kyoto Protocol, the concept was
referred for CDM funding. In 2005 ADB agreed to place the project on its list for pre-feasibility
study under its Promotion of Renewable Energy, Energy Efficiency and Greenhouse Gas
Abatement (PREGA) project. Separately, in late 2005 the New Zealand Agency for
International Development (NZAID) agreed to fund a pilot project, currently in progress under
Empower Consultants Ltd (ECL), in partnership with the National Engineering Corporation
(Pakistan) and a Landhi NGO, the Society for the Environmental and Economic Improvement of
Cattle Colonies in Karachi (SEEICCK). The project was endorsed by the Alternative Energy

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Development Board, Government of Pakistan. This pilot is now in its planning stages and
commissioning is expected in late 2006.
The pilot plant will be used to demonstrate the process in the Landhi context, train staff, and
obtain empirical data on process variables to permit optimisation of the design for an up scaled
project to treat all of the waste produced at the cattle colony. The sale of organic fertiliser has
not been formally commercialised in Pakistan yet. The pilot, based on about 1% of the waste,
will identify markets to grow with the expanded production of the downstream project.
The political, social and environmental drivers behind the project are now aligned. Given local
poverty and unemployment, the national energy deficit, need for organic fertiliser and financial
viability, the project will make a useful contribution and is expected to be sustainable.

Background

The potential of the waste-to-energy-and-fertiliser concept at Landhi to create win-win


outcomes is so clear that it begs the question as to why this opportunity has not already been
seized. In the following sections the issues, opportunities and constraints are discussed.

4.1

Sectoral Context

The waste-to-energy project at the Landhi Cattle Colony sits primarily within the environment
sector. As the project will produce biogas and/or electricity, fertiliser and significant GHG
emission reductions from the waste, it also has relevance to the energy and agriculture sectors.
Institutional disarticulation is a major contributor to past failure to address the problems and
realise the opportunities that this project represents.
4.1.1

Environment Sector

Pakistans environmental legislation is relatively recent. An Environmental Protection


Ordinance was promulgated in 1983, followed by development of a National Conservation
Strategy (NCS) in 1992, and in 1997 by the passage of the Pakistan Environmental Protection
Act (PEPA) to give effect to the Strategy.
The institutional structure comprises the Pakistan Environmental Protection Agency at federal
level, and provincial environmental protection agencies. A coordinating Pakistan Environmental
Protection Council predated the PEPA, and was reconstituted under the Act as an apex agency
comprising stakeholders from trade, industry, academia, concerned government agencies, and
civil society groups. The federal Ministry of Environment is the relevant executive arm of the
government. An energy conservation agency (ENERCON) has wide ranging responsibilities for
identifying and implementing energy conservation and efficiency measures. The Pakistan Forest
Institute and the Zoological Survey are attached to the Ministry of Environment. A National
Council for Conservation of Wildlife is responsible for Pakistans international obligations in
this field.

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The Act provides for establishment of National Environmental Quality Standards (NEQS), a
monitoring and impact assessment regime, and delegation of enforcement responsibilities to
provincial-level environmental protection agencies. Standards are being harmonised with those
of other countries in the region, and are still somewhat limited in purview.
Pakistan is a signatory to numerous international environment conventions. These include the
Rio Agenda 21, signed in 1992, the United Nations Framework Convention on Climate Change
(UNFCCC), signed in 1992 and ratified in 1994, the Conventions on Biological Diversity
(CBD), Persistent Organic Compounds (POPS), International Trade in Endangered Species of
Wild Fauna and Flora (CITES), wetland and migratory species conventions. Pakistan
contributed to the ADB Asia Least-cost Greenhouse Gas Abatement Strategy (ALGAS)
completed in 1998. A greenhouse gas inventory was prepared to meet initial obligations under
UNFCCC.
Pakistan formulated its Initial National Communication on Climate Change in 2003, and
deposited its Instrument of Accession to the Kyoto Protocol Annex A in January 2005. In
February 2006 the CDM Cell within the Ministry of Environment unveiled the countrys CDM
Strategy. Salient features of the strategy are to offer one-window facilitation of CDM initiatives
through the Designated National Authority. Three technical committees have been set up to
examine proposals for renewable energy and energy efficiency, waste management and chemical
processes, agriculture, forestry and livestock. Carbon credits will be the property of the investor
without government deduction, and will attract no tax or duty on transfer. The tariff paid to
CDM energy project investors is not to take the value of carbon credits into consideration; the
carbon credits are regarded as an incentive for green investment. The CDM Cells project
evaluation mechanisms recognise social as well as environmental benefits. Pakistan is a late
entrant to the CDM, but stands to benefit substantially from availability of carbon credits to
reduce the cost of clean energy provision. Poor and remote communities for whom renewable
energy technologies represent the most realistic means of electrification stand to be beneficiaries.
The main focus of environmental agencies at present is on mainstreaming environmental
considerations in the work of all government agencies, continued public awareness raising,
capacity building, and strengthening of institutions to give effect to policy and strategy.
The Landhi project relates to five of the fourteen priority areas of the NCS: maintaining soils in
croplands, protecting water bodies and sustaining fisheries, developing and deploying renewable
energy, preventing/abating pollution, and managing urban wastes. Environmental agencies are
pointing to policy incompatibilities, for example between agricultural and environmental goals,
and are articulating a need for development of a national sustainable development strategy that
integrates environmental and economic planning.
4.1.2
4.1.2.1

Energy Sector
Policy Context

Pakistans energy sector policy is formulated by the Energy Division of the Planning
Commission. There is no ministry of energy, but separate ministries for water and power, and
petroleum and natural resources. An Energy Adviser to the Prime Minister is currently working

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on a comprehensive energy policy and coordinated strategic planning of the sector. Power
generation policy is articulated in a 2002 document issued by the Ministry of Water and Power
through its Private Power and Infrastructure Board (PPIB). An annual Energy Yearbook,
including commercial energy statistics from all sources, is issued by the Hydrocarbon
Development Institute of Pakistan (HDIP). The 2004 Yearbook included renewable energy for
the first time. The Government of Pakistan has set a target of achieving 10% alternative and
renewable energy in the primary energy mix by 2015, regarded by ADB as ambitious but
achievable. In a recent press release, AEDB scaled this back to 5% by 2030.
4.1.2.2

Supply and Demand

An important focus of government policy is to improve commercial energy availability. Primary


commercial energy supply has increased over the past five years from 41.7 MTOE in 1998-9 to
50.8 MTOE in 2003-4, with an 8% increase in supply in that year alone. Net consumption of
commercial fuels in the latest available energy balance (2003-4) is shown below. Oil
consumption has dropped steadily over the past five years, and now supplies 38.5% of final
energy consumption compared with 47.7% in 1998-9. Gas, coal and electricity consumption
have all increased between 2 and 4% over this period. Natural gas now supplies 35% of
commercial energy demand, while electricity represents 16.2%.
Fig. 3: Energy Balance in Pakistan

Energy Balance 2003-4

Oil
Gas
LPG
Coal
Electricity

Data Source: Pakistan Energy Yearbook 2004:5

Final energy consumption over the past five years shows a steady trend to reduction in
dependence on imported oil, and increasing use of indigenous gas and coal. Included in gas use,
power generation has increased from 28.9% in 1998-9 to 44.7% in 2003-4. Over the same
period, CNG has increased from 0.3% to 1.5% of natural gas use, an accumulated rate of
increase of 48.7%.

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Fig. 4: Final Energy Consumption in Pakistan

Final Energy Consumption %


50
40
Oil
30

Gas

%
20

Coal

10

Electricity
LPG

0
1998- 1999- 2000- 2001- 2002- 20039
2000
1
2
3
4
Data source: Pakistan Energy Yearbook 2004:3

Despite achievements in improving supply, Pakistan continues to be energy constrained, with


demand pushing ahead of supply at a cumulative 6.1% increase per annum over the past five
years. Demand increased strongly in 2003-4, by 8% over the previous year. Percentage
movements in supply and demand during this period are graphed below. A strong policy focus
of the Government of Pakistan is bringing electricity to almost half the population currently
without service by end-2007. Since many of those without service are far from the grid,
renewable energy technologies are likely to provide the least-cost solution.
Fig. 5: Energy Supply and Demand in Pakistan

Percentage Changes in Energy Supply and Demand


1998-2004
12
10
8
6
%
4
2
0
-2

Supply
Demand

1998-9

19992000

2000-01 2001-2

2002-3

2003-4

Data Source: Pakistan Energy Yearbook 2004:3

18

4.1.2.3

Energy Forecasts

Power

In 2002, the Government of Pakistans Power Policy predicted that power capacity would be
sufficient until 2004-5. In the past five years, generation capacity has increased 23%, from
15,663 to 19,252 MW. Over this period, accumulated growth in power consumption was 5.8%
per annum. In 2004 alone, the rate was 9.18%, suggesting that the growth in demand is
accelerating, and increased capacity is meeting suppressed demand rather than achieving a
comfort level between supply and demand.

Gas

From an original resource of 42.2 TCF2 (907.3 MTOE equivalent), recoverable natural gas
reserves including associated gas in 2004 are 24.5 TCF, equivalent to 525.4 MTOE. At
depletion rate of 10 MTOE, and allowing increase in demand at 5% per annum this represents
26-27 years supply. Additional natural gas deposits exist, but require intensive investment to
develop. Energy authorities are looking to the proposed Iran-to-India pipeline to secure future
gas supplies; however, its prospects are overshadowed by ongoing international political
considerations. Indigenous natural gas is supplied by the two main utilities: Sui Southern Gas
Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) to almost all major towns
in Pakistan. Additional gas supplies are dedicated to fertiliser plants, which use it both as
feedstock as well as an energy source. The Oil and Gas Regulatory Authority (OGRA),
established in 2002 to foster competition and increase participation and ownership in the
midstream and downstream petroleum industry, regulates supply and distribution and protects
consumer interests.

Oil

Pakistan has limited indigenous oil reserves, estimated at 41 million TOE in 2005. These are
expected to last for about ten years at current consumption rates. Indigenous production
accounts for 21% of total consumption, with the balance being imported. Power generation
consumes a little over 22% of total oil consumption in the country

Coal

While coal deposits are abundant at an indicated 11,648 million tonnes, and a hypothetical
113,637 million tonnes, very little are high-grade bituminous coal, the largest reserves being in
sub-bituminous and lignite deposits in Sindh Province. More than 80% is used in brick kilns and
cement making. Power accounts for 3% of current consumption.
Additional generation from this source will face increased environmental scrutiny due to the
passage of the Environment Protection Act in 1997.

Normalized at 900 Btu/cft.

19

Renewable Energy

Pakistan has enormous renewable energy potential, with an excellent solar radiation profile, and
sporadically good wind resources. Harnessing these resources is inhibited by their relatively
high investment costs, the remote and low-density populations they would at present serve, and
scarcity of willing investors as long as conventional energy offers a better financial return.
Sector reforms that will encourage investment are still in progress. Thirty-two investors are each
separately planning wind farms in Sindh of 50 MW capacity each. If they proceed, these will
make a significant contribution to the countrys renewable energy profile.
4.1.2.4

Operation and Regulation in the Energy Sector

The main players in the electricity sector are the Water and Power Development Authority
(WAPDA) established in 1958, and the Karachi Electricity Supply Company (KESC),
incorporated in 1913. These are vertically integrated utilities with specified concession areas to
which conditional access to other suppliers applies. Reform of the power sector is high on the
agenda of the Government of Pakistan, and ADB has given substantial assistance to build
capacity in these utilities and to reform the power sector. Unbundling and corporatisation of
WAPDA, en route to privatisation, is under way. KESC, the relevant concessionaire in the
project area, has just been sold intact to the private sector.
The relevant national level regulatory authority is the National Electric Power Regulatory
Authority (NEPRA) set up in 1997 to protect consumer and supplier interests. Though NEPRA
has made some headway in ensuring equity of access to the grid at reasonable cost, the current
regulatory regime does not suggest awareness of new technology that makes net billing
technically feasible and cheap. It is thus not well adapted to facilitating small inputs of
renewable energy.
The Private Power and Infrastructure Board (PPIB) was set up in 1994 to attract investment in
Pakistans power sector. It initially operated under the Power Policy of 1994. This was
augmented in 1995 with hydroelectric (hydel) and transmission line policies designed to remove
investment roadblocks. A revision of the power policy in 1998 took further steps to reduce
investment disincentives, including permission for unsolicited bids and removal of competitive
bidding requirements for small hydel and renewable energy proposals. A further revision in
2002 opened a single-window, fast track clearance system, and provided tax incentives to attract
private power investment in projects of capacity over 50 MW for which feasibility studies exist.
Applications should now take less than eighteen months from pre-qualification to bid to issue of
a Letter of Support to the successful bidder. Where a feasibility study does not exist, the time
from submission of a proposal for development of a raw site to issue of a Letter of Support may
take three to four years. The PPIB secured FDI worth US$ 4 billion over a period of three years,
mainly in thermal generation facilities. Fourteen of these have been commissioned since 1996,
while the PPIB has processed 75 thermal, three coal, 39 hydro and three renewable (wind)
project applications. Two thirds of the hydro projects are below the nominal 50 MW threshold
required for PPIB involvement.
Projects under 50 MW can be executed directly by provincial governments, and are subject to
their regulatory processes. All projects are subject to the national environmental laws. Tax and
import duty incentives exist for investments in renewables that do not apply to oil-fired

20
generation. The tariff is determined by NEPRA, informed by the investor, the provincial
government, and the power purchaser. The power price is calculated according to the fuel
source. For firm power (i.e., non-renewable), the tariff comprises an energy as well as a
capacity price component. In the case of renewables, the capacity price purchase element will
usually be the larger component, since the fuel is effectively free, and a single-part tariff has thus
been proposed for the initial wind projects under an immediate-term renewable energy policy
awaiting final GoP approval.
There are established and transparent tariff determination formulae for this process that recognise
cost of plant and equipment, depreciation, and return on investment. Applicants are encouraged
to reflect in the proposed tariff the full cost of service. Tariffs may be set below the cost of
production if financially sustainable. They should take into account government subsidies.
These currently apply to the lifeline block (up to 50 kWh/month) and certain rural consumers.
The price set for one plant utilising a particular fuel tends to set a benchmark for subsequent
units using the same fuel. A standardised application fee structure applies, payable to the PPIB
or the province, and varying with the scale of the project. The same provisos apply to publicprivate partnerships.
4.1.3

Fertiliser Sector

Fertiliser continues to be a major import for the country, with some 38% of its supplies imported.
The National Fertilizer Corporation is the state trading and price stabilisation agency that
manufactures, imports and distributes chemical fertilisers. The National Fertilizer Development
Centre, a state agency supported by the FAO, was set up in 1977 to increase farmer awareness
and encourage the use of fertilisers. This has succeeded to the point where the environmental
impact of chemical fertilisers is now of concern. Total chemical fertiliser use trends over the
past ten years are graphed below.
Fig. 6: Consumption of Inorganic Fertilisers in Pakistan
Fertiliser Consumption 1994-2004
3000

'000 tonnes

2500
2000

Nitrogen

1500

Phosphate
Potash

1000
500
0
19934

19956

19978

19992000

20012

20034

Data source: Ministry of Agriculture

Increased availability of indigenous gas is contributing to this growth, graphed below. Fertiliser
production takes priority in allocation of gas supplies.

21

Fig. 7: Utilisation of Natural Gas for Fertiliser Production in Pakistan

Natural Gas Consumption for Fertiliser Feedstock


150000
145000
MCF 140000
135000
130000
125000
120000
115000
1998-9

19992000

2000-1 2001-2 2002-3 2003-4

Data source: Pakistan Energy Yearbook 2004

Environmental impacts aside, dwindling gas reserves call into question the sustainability of this
growth. NFDCs present emphasis is on educating farmers to use a combination of organic,
inorganic and bio-fertilisers for balanced plant nutrition and soil fertility.

4.2

Sectoral Opportunities and Constraints

The waste-to-energy concept offers opportunities in all the main sectors it touches. Energy
security is a major concern of the Government of Pakistan (GoP). Recent power sector reform
efforts, and the establishment of the Alternative Energy Development Board (AEDB), now
placed directly under the Ministry of Water and Power, sends a signal about the seriousness with
which this is taken. Energy supply remains constrained. Fertiliser is in short supply. The
environment is approaching crisis point in the areas of waste management in general. Un- and
under-employment is a serious social problem. The Landhi project has therefore attracted solid
institutional support from all players.
4.2.1

Energy Sector Opportunities and Issues

The Landhi project has the potential to make a useful contribution to either gas or electricity
availability in the area. Load shedding in the project area is common and negatively impacts on
the standard of living and commercial investment decisions in the area. Many of the farmers
own and operate small standby diesel generator sets to ensure continuity of supply, such as the
one pictured below.

22
Fig. 8: Landhi Farmer with Standby Generator

The installation at Landhi will receive the waste from 400,000 heads of cattle, which at an
estimated average of 18 kg per head per day yields 7,200 tons of raw dung every 24 hours. This
dung will produce at least 196,000 m3 of methane (CH4) per day. Options for utilisation include
conversion to electricity or to CNG. Allowing an electrical conversion efficiency of 28%, this
will yield approximately 24 MW of electrical output, or 564 MWh per day. This is small in
terms of overall energy consumption in Karachi, but is expected to make a significant difference
to the power availability and quality in the Landhi area. Alternatively, the methane could be fed
into the pipeline, or scrubbed, compressed and sold as CNG, yielding around 64,500 tonnes of
CNG per year, sufficient to fill 18,000 standard cars per day.
Estimated gas outputs are based on preliminary findings on dung quality. Evaluation of dung
quality is ongoing to test for consistency.
The Landhi demonstration will provide the basis for a waste treatment and a small power plant to
supply operational needs at Landhi itself. Surplus gas may be converted to compressed natural
gas (CNG) to fill around 150 cars per day, or to generate an additional 50kW of electricity.
There is potential to replicate this output at two other large military-owned cattle farms in the
country, one at Okara some 100 km south of Lahore, the other at Sargodha, an important air
force base around 250 km south of Islamabad. The team did not visit these facilities, but
Defence authorities believe that there are around 100,000 head of stall-fed cattle at each, one
quarter the size of the Landhi colonies.
The pilot plant will be of a scale that could be adjusted to towns or cantonments that collect 80
tonnes or so of compostable cattle, market, abattoir or green waste per day. Biodigester designs
are able to be scaled-up or down, with small designs handling less than 100 kg of material per
day. Cantonments are a peculiarity in Pakistani civil administration. Originally purely military
settlements, civilians have infiltrated cantonment land, and civilian military in such areas have
become the effective local government. As such they represent a cadre with relatively good
awareness of environmental hygiene, and better than usual skills and disciplines to implement
solutions. Further research is required to identify the number and location of Defence
cantonment cattle colonies.

23

4.2.1.1

Energy Sales and Pricing

The Landhi project falls into a definitional vacuum in that biogas is not explicitly defined as
natural gas for regulatory purposes, although it could conceivably be covered under the general
definition of natural gas in the OGRA Ordinance.3 The Oil and Gas Regulatory Authority
(OGRA)s jurisdiction over the proposed project, unless the biogas is converted to CNG or sold
to a distributor, therefore needs to be made unambiguous.
Similarly, conversion of biogas to electricity if sold to the grid will break new ground for
NEPRA. Tariffs are normally set by NEPRA based on the proposal from the seller to the
purchaser, and taking account of the generation source as an indicator of front-end cost. Since
this fuel source is currently without commercial precedent, power pricing will have to be
undertaken from scratch if the energy generated is to be converted to electricity.
196,000 m3 of CH4 (methane) gas could be produced, or converted into 564 MWh of electricity
per day, if all the raw dung from the 400,000 cattle were to be captured and processed. If this
course were selected, the project would fall within provincial jurisdiction. If the enterprise sells
power, it would also require a generation licence from NEPRA. In the interests of predictability
for distributors and consumers, it is to be expected that the issue of a generation licence would
depend on reasonable indications of stability of fuel source and electricity supply, as is the case
with large-scale hydrocarbon-based IPP generation projects.
The project is located in the exclusive service territory of KESC. At present, KESC is selling
power at an average rate of Rs 3.5-4.0 per unit. IPPs using furnace oil to generate currently have
about a 60% load factor, and sell to KESC at Rs 6.3 and 6.5 per unit. Tariffs are usually fixed
for seven years. A power sale tariff of Rs 5.03 has been applied in this financial model, as this is
the present rate allowed for natural gas generated electricity in Pakistan.
For small power producers, the option of becoming a second-tier supplier to a limited area exists.
If a captive consumer was found, and the power was not sold to the grid, the generator would
have to obtain a No Objection Certificate from KESC to supply the consumer. At present, since
the project site is located in a poor area with a high percentage of subsidised lifeline block
consumers (charged Rs 1.44 per unit up to 50 kWh per month) and around 50% technical and
non-technical losses at the local transformers, this is unlikely to be an attractive option until
distribution system strengthening is implemented.4 Against this, in a locally much-resented
anomaly, cattle colony farmers are levied at the industrial power rate, Rs 5.4 per unit, rather than
the Rs 3.53 that applies to agricultural loads. Average household consumption in the KESC
supply area is 130-140 kWh per month, and a typical household monthly bill is Rs 400-500.

In Chapter 1 of the OGRA Ordinance (XVII of March 22, 2002) under Definitions: natural gas means hydrocarbons or mixture of
hydrocarbons and other gases which at sixty degrees Fahrenheit and atmospheric pressure are in the gaseous state (including
gas from gas wells, gas produced with crude oil and residue gas and products resulting from the processing of gas) consisting
primarily of methane, together with any other substance produced with such hydrocarbons.
In areas where shielded cable has been substituted for open wire to prevent theft, losses have dropped dramatically, fatal
accidents have halved, and supply has stabilised.

24
The same one-window procedures as for PPIB projects over 50 MW apply at the provincial
level. Under the 2002 Power Policy, unsolicited bids for plants using renewable energy are
permitted even without a full feasibility study, and without the requirement for competitive
bidding, although the approvals procedure may take longer in such cases. Since the potential
Landhi power purchaser KESC has recently been sold to the private sector, its connection policy
for small producers may change, but will still be subject to NEPRA regulation. Steps towards
approval that would currently normally apply to the Landhi proposal are described below.
1. An independent pre-feasibility study is undertaken.
This includes an initial
environmental examination (IEE). If carbon credits can be claimed, a Project
Information Note (PIN) may be lodged with the CDM Cell within the Ministry of
Environment.
2. Submission of proposal on the raw site to the Sindh provincial governments Investment
Cell. If reviewed positively, a full feasibility study may be initiated. An Environmental
Impact Assessment (EIA) may also be required if the EPA determines potentially major
adverse project impacts from the IEE; however, despite the legal provision, actual
precedent for such an additional requirement does not exist.
3. Following a successful review of the full feasibility study by the provincial government, a
formal Letter of Support (LOS) from the provincial government is sought.
4. Following approval, implementation and commissioning requires negotiation with KESC
of connection and wheeling charges if the gas is to be used to generate electricity. The
new owners of KESC are not expected to make changes to existing practice, and will
continue to be bound by the provisions of the Power Policy, including NEPRA regulation
and tariff approval. Under the 2002 Power Policy, the submission of a performance bond
at US$ 5,000/MW is required, along with the posting of a Bank Guarantee at US$
1,000/MW. However, this may be reduced for renewable energy projects of less than 50
MW capacities under the new RE Policy to be announced by the GoP shortly at time of
writing.
Numerous other options for utilisation of the gas exist, including direct sale to the SSGC pipeline
for wider distribution, sale of gas to a specific consumer via a dedicated pipeline, or the
production of other saleable gas products, such CNG. There are no precedents in the country for
these options. CNG has a ready market in the automotive sector as it is rapidly growing in
popularity as petrol costs have risen in recent years. CNG is an energy intensive product,
however, requiring careful gas scrubbing to remove hydrogen sulphide and carbon dioxide, and
drying to remove water vapour. It is then compressed to around 250 bars pressure for filling
automotive cylinders. CNG presently retails for Rs 30 per kg in Pakistan, and there is a
reportedly insatiable demand at that level. At city stations, long queues of vehicles awaiting
filling are common. The quantities of gas generated at Landhi would be too large to sell on or
near the digester site. In areas too distant from the gas pipeline, mother-daughter filling stations
are deployed. Methane from the digester could be scrubbed and bottled to supply some of this
market.
The merits of the various end-use options should be explored in detail during the feasibility stage
using most recent gas and electricity prices, after discussion of possible end-use options with
local large-scale energy consumers.

25

4.2.1.2

Subsidies

The GoP, in principle, tries to avoid subsidies and recognises the necessity for utilities to run
efficiently. However, it is considered that the poor should be provided minimum service in the
interests of social equity. The government, therefore, pays to the utilities the difference between
actual costs and the subsidised cost where price rises place production and power purchase costs
above the lifeline tariff. KESCs generating costs in 2004-05 amounted to Rs 5.556 per unit
generated, and Rs 6.1424 per unit billed. Revenue from energy sales was Rs 4.1288 per unit
generated, and Rs 4.5643 per unit billed. Operating losses are due to very high non-technical
losses - more than half the supply in some areas - as well as to cross-subsidise lifeline block and
agricultural consumers. KESC received a subsidy amounting to 24.26% of its 2004-05 revenue
from the government that enabled it to sustain cheap supply to the vulnerable segment of its
consumer base. This enabled the company to realise a modest before-tax profit. However, under
World Bank-led sector reforms, both direct and cross subsidy levels for natural gas are gradually
being phased out to realize better economic value of energy resources, remove price distortions
and inefficiencies, and rationalize tariffs. Therefore, retail natural gas prices are expected to rise
further in the near future, at a pace determined largely by political considerations.
4.2.1.3

Organisational and Management Capacity

KESC has the full range of competencies needed to purchase and distribute power from the
Landhi project. However, it has no experience in operating waste-to-energy plants. As the first
of this scale in the region, the Landhi waste-to-energy installation will require technology and
skills transfer to local engineers. Principles of biogasification of cattle waste are well understood
in Pakistan, but not on the industrial scale required at Landhi. Technical assistance and support
is available from both the AEDB, as well as the Pakistan Council for Renewable Energy
Technology (PCRET) and the Pakistan Agricultural Research Council (PARC), all based in
Islamabad, for generic issues related to biogasification, but specialist gas, power and waste water
treatment skills will be required for the planning and implementation of the project. Some
managerial capacity and experience will be gained during the planning, construction and
operation of the pilot phase, but with its daily volume of 80 tons of dung (around 1% of the total
volume), it will be dwarfed by the full-scale project.
4.2.2

Fertiliser Sector Opportunities

Fertiliser is a vital input for agriculture. Agriculture still employs half of the countrys entire
labour force, contributes about a quarter of the GDP, and provides most of the countrys food.
Environmental agencies comment with concern about the still rising population and warn of the
onset of the law of diminishing returns from using inorganic fertilisers to boost production.
Agricultural statistics show that production of some important food crops and fruits are already
in decline over the past five years, and water availability is declining while fertiliser off-take is
rising. In 2000-01, Pakistan consumed an average 138 kg of fertiliser per cultivated hectare,
compared with neighbouring Indias 103 kg, or the USAs 106 kg. Since 1997, yields per acre
for wheat and rice have made modest and uneven gains, while sugarcane, maize and gram yields
have fallen. This suggests that potential for further intensification is limited.

26
The potential for cheap organic fertilisers with illustrated potential to improve the effectiveness
of inorganic fertilisers in combination is therefore promising. At present the market for sale of
dung is an informal one. At Landhi, the occasional purchaser will pay Rs 3,000-5,000 for a
small truckload of half-dried loose dung. It is not weighed or measured, but the quantity seems
to be around two tonnes. Garden centre owners sometimes buy an even smaller truckload, about
1 tonne, for Rs 1,500 to 2,000. They may cover this with a tarpaulin and leave it to rot for up to
two years. They state that they can re-sell a load or part thereof for Rs 6,000 delivered to the
urban consumer. The fertiliser from the biodigester will be an enriched product compared with
the products currently available, though these act as a useful benchmark for assessing willingness
and ability to pay. There is apparently a ready city market for boutique potting mix or fertiliser
bagged in 10 to 20 kg bags for city gardens and balcony flowerpots.5
The Pakistan Agricultural Research Council prepares and sells compost at Rs 20 per kg for the
city garden market. A representative states that it sells well. The Pakistan Council for Scientific
and Industrial Research has developed a seaweed-based fertiliser that sells at Rs 35 per half kg,
illustrated below. It seems likely that a city market could be developed for organic fertiliser/soil
conditioner/potting mix for the Karachi market.
Fig. 9: Boutique organic fertilisers on
the city markets

Bulk fertiliser from Landhi seems likely to have a distribution radius of 150-200 km from
Karachi before the costs of transport render it uneconomic. Within this radius, significant
potential markets exist in Badin, a horticultural centre, and Hyderabad, a sugar-producing and
horticultural area. Sugar industry representatives have already expressed interest in bulk
purchase. Trucks bring dry and green feed into the colony from Sindh, Punjab and Balochistan.
They often return empty. A group of some twenty truck drivers consulted indicated ready
willingness to truck bagged fertiliser back to the point of origin of the feed, thus completing a
natural feedback loop. Work is continuing on assessing willingness-to-pay when long distance
transport costs are included.
5

An organic fertiliser prepared by PCSIR from dried and powdered seaweed and with comparable NPK content is offered at Rs 35
per bag of about 500 gm.

27
At a conservative production cost of Rs 100including bagging, handling, transport and profit
margin per 50 kg bagand a projected retail cost of Rs 200-300, organic fertiliser from the
project compares favourably with inorganic fertilisers. While it is not as nitrogen-rich, the
digestion process renders its nitrogen readily available compared with inorganic fertilisers.
Chemical fertiliser prices have risen sharply since they were decontrolled in 1986 and 1995. List
prices for urea are Rs 411, nitrophosphate (NP) at Rs 539, diammonium phosphate (DAP) at Rs
765 and potassium sulphate (SOP) at Rs 780 per 50 kg bag.6 However, hydrocarbon prices have
risen so steeply that a 50 kg bag of imported urea today costs Rs 1,100. It is being sold at Rs
500, and government is making up the balance to soften the severity of this in the short term.
These events all predispose the market to receptivity of a new indigenous alternative product.
A 1999 Symposium on Integrated Plant Nutrition Management concluded that blends of
inorganic and organic fertilisers, indicatively between 50:50 and 75:25, produce better yields of
rice and wheat than inorganic fertilisers alone. This fertiliser blend also assists absorption and
retention of chemicals that otherwise leach and contaminate ground and river waters. At the
organic-inorganic fertiliser ratios found by NFDC to give optimal yields, a farmer could displace
25% of urea with organic manure and achieve a 4% increase in grain and a 9% increase in straw
yield at a 6.75-10% saving in fertiliser costs.
Fig. 10: Productivity Responses to Use of Inorganic: Organic Fertiliser Mixes
Crop Yields by Inorganic - Organic
Fertiliser
Mixture Rates
10
8
Tonnes per 6
4
Hectare
2
0

Yield t/ha Straw


Yield t/ha Grain
100:00 75:25

50:50

25:75

Rates of Application
Urea:Farmyard Manure
Data Source: NFDC Symposium on Integrated Plant Nutrition Management, 2000:14.

This analysis measures only the minimum potential financial benefits to the farmer. The
economic benefit potential to the country in terms of import substitution, averaging down of the
transportation costs of servicing the Landhi farmers with fodder by providing a return load for
trucks, improvement of soil condition, and prevention of chemical run-off into waterways
requires more detailed investigation.
The Landhi cattle colony is close to a port and rail line. In the past, some dung was dried, and
exported to the United Arab Emirates. The product was not formally weighed, but farmers
6

2003 prices, Federal Bureau of Statistics, Islamabad on http//:www.nationalpak.com/retailprice accessed 8.12.05

28
received around Rs 100 (US$ 1.72 at todays rates) per tonne. Freight costs to the UAE were
one quarter of the cost of trucking dung back to the countryside from which feed is supplied. An
outbreak of rinderpest in the colony closed this trade in 1997, and the UAE sourced alternative
supplies from Bangladesh and India. Members of SEEICCK, an NGO set up to improve
economic and environmental conditions in the cattle colonies of Karachi, are investigating
whether this trade can be re-opened, though it is recognised that from an environmental
standpoint it is preferable to use the dung domestically.
Opportunities to use the liquid effluent for fertigation or possibly hydroponics await laboratory
analysis of the effluent from the demonstration phase. There will indubitably be opportunities to
use this by-product to advantage to water and manure public green areas or private plantations
within reasonable reach of the installation. Analysis will enable determination of optimal
application rates. The Karachi City District Government has informally undertaken to deploy its
tanker trucks that currently water public gardens and median strips to utilise the liquid manure to
good effect. A private company seeking to establish biofuel crops on wasteland at Keti Bandar,
two hours journey from the project site has expressed interest in taking the liquid waste. Sugar
or vegetable farmers who plant between channels are potential users. There are many growers
within the 100 km radius of Landhi who supply the citys vegetable markets.
Utilisation of cattle waste as fertiliser in the past has been inhibited only by weak coordination
amongst stakeholder institutions. There has been no dialogue on the issue between energy,
environment and social development organisations, and an inability to enforce environmental
regulations has resulted in inaction, allowing a substantial resource to be wasted.
4.2.3

Environment Sector Issues and Opportunities

Until environmental concerns are mainstreamed in all government policy, the environment sector
faces a formidable task. Environmental awareness amongst institutions as well as the general
public is still low. The pressure of population on resources is high and growing albeit at a slower
rate, down from 2.47% per annum in 1995 to 1.9% in 2004. Notwithstanding this, the most
marginalised and poorest sectors of the population contribute to a worsening povertyenvironment nexus. The Landhi Colony, expelled from Karachi City in 1958 into the then 35 km
distant desert, expresses this phenomenon.
The city has since crept to within 20 km of the Colony, now at the end of a conurbation including
Landhi Town, and it is about to be encircled to the north by a new industrial complex. Cattle
numbers have in the meantime increased from 15,000 to 350,000 in the main colony area, with
two more colonies planned in this vicinity, and a further 600,000 cattle in smaller satellite
colonies around Karachi. The human population features pockets of Punjabi, Baloch, Pathan and
ethnic Aryan Bangladeshis, mostly refugees from lack of resources and unemployment. The
internal economic refugee groups tend not to invest in their places of residence, but rather to
send remittances back to their villages. There is therefore very limited public or private social
infrastructure, and limited physical infrastructure. In the absence of any realistic prospects for
enforcement of environmental standards, this situation is not likely to improve until needs and
wants perceived to be higher up the hierarchy are satisfied.

29
The environment sector has been in the spotlight since the policy on the use of the CDM that was
adopted in mid-February 2006. This will provide a means through carbon trading to fund some
of the measures necessary to prevent further environmental degradation, and to highlight
opportunities to fund environmental improvements, in particular the management of solid waste
which generates methane, currently deemed to offer the best opportunities in generation of
carbon credits due to its high global warming potential. Both energy and fertiliser are enabling
inputs to economic growth and social development. These sectors are both growing in size and
importance.
The environment sector presents numerous opportunities for activities that align with GoP and
ADB policies. Waste management in Pakistan is the responsibility of the relevant local
municipal authority. No city in Pakistan has a sanitary sewage system, however. Though
sewerage is collected and piped, there is no treatment, and even in Islamabad it is ultimately
dumped into streams. Several public municipal and industrial wastewater treatment facilities are
currently being planned, although these would only address a fraction of national needs. Sewage
and municipal waste management thus, prima facie, represents a significant opportunity for
treatment of waste and recovery of gas. The team was able to identify some unpublished studies
undertaken in Karachi and Rawalpindi, but the subject requires systematic quantification and
characterisation of waste stream elements to enable a first-cut estimation of potential.

30

Fig. 11: Below: Waste management in Sector F7/2, a residential quarter of Islamabad. The
dumpster at the top of the bank is emptied daily. The pipeline across the stream, which acts as an
open sewer, carries natural gas.

Left and below:


Bridges across the stream by Jinnah
Supermarket in F7, Islamabad

As a subset of waste stream management, the Landhi Cattle Colony presents an opportunity to
realise some of this potential at a location and on a scale that will have a powerful demonstration
effect. It is also an opportunity to demonstrate the spin-off benefits to the other concerned
sectors in generating jobs and incomes, power and fertiliser, and possibly fertigation or
hydroponics enterprises.

31
Capitalisation on the opportunities in waste-to-energy is hindered by a number of factors. First,
it suffers from weakly articulated and enforced environmental policy. This is discussed further
below.
Second, it is multi-sectoral, and requires coordination of environmental, agricultural and energy
sector inputs to maximise benefits. The institutional framework has not been conducive to
effective coordination since responsibilities and budgets are constrained, and do not readily
admit innovative activities, even though there is policy consensus between sectors about the
desirability of recovery of energy and fertiliser from waste.
Third, it suffers from the absence of demonstration effect to date of seeing is believing. Use of
waste for energy has not been undertaken before in Pakistan except at the level of household
scale biogas plants where direct use is made of the gas for household cooking or animal feed
preparation. On a medium-to-large industrial scale, the processes and equipment are unfamiliar;
even the large cities have no management strategy that includes capture of energy from waste,
and indeed the waste management strategies per se are sub-optimal, featuring at best trench
burial of unsorted city wastes. Waste recovery and recycling is the preserve of the poorest of the
poor; garbage pickers who recover saleable paper, glass or scrap metals. A first-of-its-kind
composting plant with a daily capacity of processing 1,000 tons of solid waste to produce 250
tons of organic fertiliser has just been inaugurated in Lahore.
4.2.3.1

Regulation and Enforcement in the Environment Sector

There is still work to be done in harmonising and adopting environmental standards, and
establishing laboratories qualified to undertake environmental sampling and analysis before
prosecution for environmental breaches is technically a realistic option. Emphasis is at present
given to soliciting voluntary industrial compliance with the National Environmental Quality
Standards, generally held to be a more effective approach than issuing Environmental Protection
Orders and prosecuting offenders who may have few realistic options to polluting through their
economic activities. Towards this end, the EPA has recently launched the Self Monitoring and
Reporting Tool (SMART) programme for industrial pollution data collection nationwide after
earlier trial runs and refinement. Critics, however, point to laxity and irregularities in
administration of environmental law.
At the time of the State of the Environment Report, 2005, the EPA in Punjab had issued 143
Environmental Protection Orders, Balochistan 89, and 3 were issued in the Federal Capital
Territory. Several show cause notices have been issued in Sindh. As compliance was
obtained, prosecution did not follow. EPA is well aware of the blatant infraction of
environmental regulations in the dumping of cattle waste. It does not prosecute individual
farmers, since it is recognised that they are offered no alternative by the municipal authorities
responsible for solid waste management. Nor are the town authorities currently prosecuted, due
to lack of applicable standards against which to enforce environmental law, and lack of
accredited laboratories to validate data.
Two Environmental Tribunals have been set up in Lahore and Karachi, and three of the four
Provinces have designated Environmental Magistrates. The courts have power to levy graduated

32
pollution charges for exceeding NEQS limits. These charges are paid into a Sustainable
Development Fund administered by each provincial government.

4.3

Project Contribution to Sustainable Development

The project will have numerous spin-off benefits that would contribute to sustainable
development.
4.3.1

Employment

Lack of employment opportunities is a countrywide problem, and is locally acute in the Karachi
cattle colony areas due to the in-migration of primarily unskilled labour from the surrounding
countryside. There is potential to create a substantial number of sustainable livelihoods for the
poor through the project. Dung collection at Landhi could use dump trucks collecting about six
loads of ten tonnes each day. Alternatively some 140 two-person teams could collect the 8,000
tonnes daily, if this task is undertaken without trucks.
For the pilot, and replication in smaller colonies on the scale of the demonstration project, a lowtech option would be to use donkey teams. Each team of two could handle 4-5 tonnes per day,
the output from around 200 cattle, one full time equivalent labouring job per 100 heads of cattle.
A colony of 1,000-2,000 buffaloes could therefore support a quite viable small enterprise
employing up to 20 labourers, administration, and technical staff. This size of colony is well
within the parameters for a small town or even a well-to-do individual farmer. The prospects for
job creation from commercial recovery of manure from such colonies and returning it to the
point of origin as fertiliser are also, prima facie, quite bright.
Jobs will also be created preparing and printing bags, bagging, and distributing the fertiliser.
4.3.2

Gender Impacts

If all the manure were sold in bulk 50 kg bags, the full-scale enterprise would need around
29,000 sacks stitched and printed each day. This work would be primarily targeted to women. If
each sack takes around 10 minutes to stitch and print, 500-600 full time equivalent jobs could be
created for women. Female participation in the work force is highly constrained by cultural
norms, but three CBOs in the area have established industrial homes where it is acceptable for
women to work, a short distance from their places of residence. There is thus already some
social infrastructure ready to operationalise the employment opportunities for women from the
Landhi project. If this function is performed in existing factories, womens participation will be
less easy.
4.3.3

Environmental Improvement

The terrestrial environment at Landhi is buckling under the waste load from the colonies.
Canyons of cattle dung line the roads. The area is fly infested. The project will remove most of
the solid cattle waste and convert it into three income streams, improving both the appearance
and the sanitary conditions in the area.

33

The City District authorities have indicated they will grant access for the demonstration site to a
tract of wasteland opposite the present abattoir in Bin Qasim town. The site is currently used as
a dump. Some digester tanks were constructed on it to treat abattoir and other waste, but were
not used. A small derelict building stands on the site, and can be rehabilitated for office use.
This will improve and beautify a centrally located block of land in the town.
The only new environmental impacts of the up scaled project will consist in the estimated 20
hectares of land to be used, and the biodigester and other structures built for full implementation.
City District authorities have provisionally earmarked a large tract of desert land immediately
east of the present colonies for this purpose. It is not a unique environment and is not believed to
house any unique or endangered species. It has no known cultural or religious value, and no
particular scenic or recreational value. The structures to be built, akin to a large city wastewater
treatment plant, will not introduce new or toxic materials to the environment. Visual pollution
can be minimised by establishing trees around the perimeter, sustained by the liquid effluent
from the plant. The treatment plant will be an industrial structure, but will remove noise, smell,
traffic and pollution from a much larger residential and commercial area so is considered a large
net environmental benefit.
4.3.4

Improvements in Handling Abattoir Waste

Slaughter of culled animals takes place at an open sided abattoir opposite the site of the
demonstration plant. Most animal waste is recovered and turned into hides and skins, bone meal,
dried blood and sausage casings. There is a small residue, principally stomach contents and
some blood and gut that forms a nauseous residue dumped on adjacent open ground. This can be
chopped and treated in the demonstration biogas digester. It will enhance the fermentation
process and enrich the organic fertiliser.
Fig 12: Abattoir waste disposal

34
4.3.5

Fresh Water Impacts

Landhi is located in a desert area. Its water is supplied from a lake approximately 80 km to the
north. Farmers pay a flat Rs 4,000 per annum water rate. Usage metered at a farm of 200 cattle
over a period of six weeks in the coolest part of the year indicated an average consumption of 38
m3 per day; more would be used in the hotter months. Approximately one-third of this water is
used for drinking, bathing the cattle, and washing down the sheds. The balance carries dung to
the coast. Farmers' report show that about 90% of the dung is flushed. Allowing for the 8,000
m3 of water required for the digester each day, net daily water savings of around 450,000 m3 can
be made if cattle waste is not flushed to the sea. Groundwater is contaminated. The project will
not ensure safe drinking water in the area, though water quantity and quality may improve
gradually after implementation.
4.3.6

Impacts on Power Use

At present, most farmers use pumps, typically of 1 kW rating, for about four hours per day to
pump water used to wash waste into drains. This usage will roughly halve, saving about 40,000
kWh of power daily in total, and resulting in private savings on electricity bills in the colony of
over US$ 7,400 per day, a not insignificant benefit in a poor area. During the quite frequent
scheduled or unscheduled load shedding in the area, power is often supplied from private petrol
or diesel generators. There will be an additional environmental benefit in displacing this
hydrocarbon-based generation.
4.3.7

Impacts on the Marine Environment

The coast by the outfall from the colony is heavily polluted with organic waste from the colony.
Tidal drift carries industrial waste from the Korangi stream that flanks the export-processing
zone immediately to the west of the main cattle colony. Water and soil analysis close to the
outfall are being conducted to provide quantified baseline information on coastal conditions.
Mangroves in the area are dying. Livelihoods of the fishers on the coast are adversely impacted.
The project will remove the bulk of the organic waste, and may permit some recovery over time
of coastal plant and marine animal life.
4.3.8

Green Spaces

At present there are no public green spaces in the vicinity. The construction phase of both the
demonstration and the up scaled installation to follow will enable flattening some of the
surrounding area and planting to create some green space that can be sustained by liquid effluent
and used for public amenity.
4.3.9

Downstream Potential for Use of Liquid Waste

When laboratory analysis of the waste is available from the demonstration installation, it will be
possible to identify productive uses for the liquid as well as the solid waste. This may be used on
public green spaces and median strips, but may also have commercial potential as a basis for
hydroponics or for watering and nourishing commercial crops. A preliminary plan to utilise

35
liquid waste to cultivate biofuel crops on wasteland under a wind farm planned at Keti Bandar is
currently contemplated. Conceptual encouragement for this activity has already been obtained
from AEDB.
4.3.10 Return of Benefits to the Community
The demonstration installation will be managed by the Society for Environmental and Economic
Improvements in the Cattle Colonies of Karachi (SEEICCK). Following stakeholder meetings in
Karachi, it was decided in principle to form a Management Board comprising SEEICCK, the
City District Government, the farmer groups and a community representative. Some profit will
be returned to the City District Government in recognition of its grant of land access, and to the
community through representative groups. There will thus be some generalised social benefit
from the demonstration phase of the project. It is hoped that this will build confidence and
capacity in members of the community to enable participation in the up scaled project.
4.3.11 Greater Use of Renewable Fuels
The nutritional and cultural need for milk will grow with the population, and possibly increase
with improved incomes. Cattle dung is therefore likely to be a sustainable and growing source of
renewable energy. Two new smaller colonies in the vicinity are already under planning to meet
the growing market. The possibility that the colony might some time be moved further away was
mooted with City District officials, but dismissed by them, since the project will remove the only
incentive to relocate the colony which is to clean up the environment. There is a remote
possibility that a new model colony might be reconstructed on waste government land close to
the present site, but no drivers exist at present to take this step.
There is potential for replication of biogasification projects in other parts of the country that
should multiply these benefits.
4.3.12 Reduction in Reliance on Imports
Pakistans imports have outgrown its exports at an accelerating pace over the past five years.
Prices for Pakistans commodity exports are resurgent, but rapid economic growth and rising fuel
prices have nonetheless resulted in a widening trade deficit. Import substitution is a government
priority in all sectors, including harnessing indigenous renewable energy. The balance of trade
over the past five years is graphed below.

36

Fig. 13: Pakistan Balance of Trade


Balance of Trade: Exports vs Imports 2000-2005

USD millions

25000
20000
15000

Exports

10000

Imports

5000
0
2000-1

2001-2

2002-3

2003-4

2004-5

Data source: Federal Bureau of Statistics Exports and Imports of Pakistan on www.statpak.gov.pk.

Imports of both mineral fuels and chemicals have increased in cost tenfold since 1990, and have
risen in cost at a higher rate than all imports taken as a whole.
Fig. 14: Imports of Selected Items to Pakistan
Index of Unit Values of Selected Imports

1600
1400
1200
1000
Index value,
800
1990-91=100 600
400
200
0

All
Mineral Fuels
Chemicals

2000-1 2001-2 2002-3 2003-4 2004-5

Data source: Federal Bureau of Statistics Exports and Imports of Pakistan on www.statpak.gov.pk

At an average 0.27 tonnes of diesel to generate one MWh, the Landhi project could displace 151
tonnes of diesel per day, generating at an output of 24 MW and producing 564 MWh per day if
used in a base load power generation mode. The actual power produced is difficult to estimate as
at present the chemical analysis of the base resource (raw dung) is incomplete. Conservative
estimates have therefore been used, and yield the 24 MW figure.
Indirectly, the project will assist in displacing imports, since most of the local generation is
supplied by indigenous natural gas. This has supplanted some generation from imported
petroleum.

37
Total fertiliser output will be of the order of 525,000 tonnes per annum. Substituting the NFDCrecommended one-quarter of urea application with this organic manure will save import or
production of an equivalent tonnage of urea per annum. Urea production takes priority for
indigenous gas supply, but is constrained by plant size. Recently, urea has had to be imported at
Rs 1,100 per 50 kg bag, compared with the Ministry of Agriculture list price of Rs 411. Since
farmers could not bear such an extreme and abrupt price rise, the government has reverted to
subsidy of some Rs 600 per bag. If organic fertiliser substitutes a conservative eighth of imports
by weight, the annual saving will be some US$ 27 million at the current cost to the countrys
forex reserves.
4.3.13 Contribution Towards Renewable Energy or Energy Efficiency Targets
On creation of the AEDB, the GoP set itself a target of 10% renewable energy, around 1700
MW, by 2015.7 This has recently been revised to 5% by 2030.8 At present, 32 wind power
investors are negotiating to install 50 MW capacities each in Sindh province. Short-terms plans
are to install 5.4 MW as solar home systems and 140 MW of solar thermal capacity. The up
scaled Landhi project will produce around 25 MW of electricity, almost 3% of the revised RE
target.9 Replication potential could account for a further 4% of the renewable energy target from
the Karachi cattle colonies alone, and potentially a further half of the output of the Landhi colony
at Okara and Sarghoda. Many smaller colonies exist that may replicate the demonstration scale
project, but are not yet quantified. An optimistic scenario is tabulated below.

Table 1: Electrical Output and CO2 Abatement Potential from Major Cattle Colony Wasteto-Energy Capture in Pakistan

Location

No of Cattle

MW Capacity

Tonnes CO2
Equivalent Saved
per Annum

Value of Carbon
Credits @
US$ 5/Tonne

400,00010

24

1,038,00

5,100,000

Other Karachi
colonies

650,000

40

2,026,000

11,654,000

Okara

100,000

311,000

1,793,000

Sarghoda

100,000

311,000

1,793,000

Landhi

Pakistan Energy Yearbook 2004:73

AEDB Press Release, 28 February 2006

However the 1700 MW originally targeted for installation over the next ten years is less than 10% of the 2004 installed capacity
(19,252 MW), and does not allow for growth in demand.

10

This is the figure as at 2004; two new colonies in the Landhi catchment area are under planning. Hence the figure of 400,000 has
been used in this report.

38

4.3.14 Alleviation of Electricity Supply Constraints


Load shedding is an almost daily fact of life in Landhi and negatively impacts on standards of
living and commercial productivity. Whether or not the production of power in Landhi
improves, the local supply quality and availability of power supplies depends largely on how and
where the power produced is fed into the power network. A high voltage supply may bypass
local transformers and substations and do little to improve matters, whereas a medium voltage
supply may have a more pronounced effect. Once the location, local energy needs, and power
networks are more clearly understood following the pilot project, it will be possible to consider
these issues jointly.
4.3.15 Cost Reduction
The environmental cost reduction in avoiding some 8,000 tons per day of raw dung being
dumped into the local environment is clear, and as the pilot phase water testing results are made
available, will be able to be quantified. The results are expected to show waterways and coastal
waters as being too heavily polluted to sustain life. The treatment of waste can only improve this
situation.
In terms of the retail cost of energy to local consumers, there is unlikely to be significant
reductions unless the overall project is run on a not-for-profit basis. Energy is a commodity
product, with well-established and variable market rates. While it is possible that local
production may improve energy security and local power quality, it cannot be argued that market
prices would be lower, particularly when the 24 MW output, while a useful amount of power, is
insufficient and unlikely to influence the supply and demand relationship in a city of 15 million
people.
Savings of water and power have been noted in Sections 4.3.5 and 4.3.6.
Transporting fertiliser back to the countryside from which cattle feed is delivered will average
down transport costs by providing an income stream from the return trip.

4.4

Government Policies and Strategies in the Power Sector

With substantial assistance from ADB, the power sector in Pakistan has undergone
comprehensive structural adjustment. The process of removing distortions caused by subsidy in
energy markets, unbundling and privatising the power sector is still continuing. The Private
Power and Infrastructure Board, established in 1994 to stimulate investment, offers a range of
incentives for projects over 50MW. In harmony with the 2002 Power Policy, these include:

One-window facilitation of investment in the power sector


Government guarantee of payment terms of executed agreements
Government guarantee of fuel availability
Permission for GENCOs to issue corporate registered bonds
Permission for nonresidents to be equity participants in generation

39

Concessionary customs duty of 5% for plant and equipment not manufactured locally, and
exemption for renewable energy equipment
Except for oil-fired plants, exemption from most taxes (sales and income tax, provincial
taxes and duties)
Tax holidays by negotiation for renewable energy generation
Permission of repatriation of equity and dividends (though maximum indigenisation is
encouraged)
Tariff fixing normally for seven years by transparent and streamlined process. The GoP
picks up the excess cost of supply above the subsidised price to certain categories of
consumer.

Attempts have been made to reduce delays in decision-making by publishing timetables for the
various stages of the regulatory process. The same guidelines apply in principle to negotiation of
smaller projects (under 50 MW) through parallel provincial government processes. Acquisition
of land for projects is a process that is not included, and has the potential to cause delays.
During discussions with the Karachi City District authorities regarding land for the
demonstration plant, officials identified a tract of land for which no purpose had yet been
designated. It is now in the process of being earmarked for use in future waste-to-energy
initiatives.

4.5

Regulation and Enforcement Issues

OGRA, the Oil and Gas Regulatory Authority govern the regulation of gas production and sale.
This activity will follow all applicable laws and regulations pertaining to the production and use
of Methane gas.
The Office of the Chief Inspector of Explosives was contacted and consulted with on regulations
pertaining to the production of methane. The response received was that so long as normal care
and safety procedures are followed in the handling of combustible gases, no other regulation
applies. In fact, it will be recommended that construction and safety standards according to best
international practices be followed for this project.
NEPRA, the National Electric Power Regulatory Authority, is responsible for overseeing the
contractual arrangements between the power generator and purchaser, particularly with respect to
the setting of tariffs. Should the project wish to sell power to KESC, NEPRA review and
consent of the terms of the contract will be required. This will be a precedent-setting exercise,
since no commercial biogas-to-electricity contracts are yet in force.
As noted above, regulation in the environment sector is currently weak, due to incomplete
standards, paucity of certified testing facilities and tacit recognition that polluters sometimes
have no realistic alternatives. The project may incline EPA to become more stringent in
applying environmental regulations when there is an alternative to dumping waste in the drains
and on the coast. While the farmers own the dung, at present it has negative value; some even
pay to have it removed. The project will give it some value.

40
It is possible that small incentive payments or some form of equity-for-feedstock arrangement
could be envisaged to encourage co-operation with its sanitary disposal, consonant with financial
viability of the operation.

4.6

Policy Coherence between ADB and Government of Pakistan Objectives

Dominant themes in the ADB Country Strategy and Program are for sustainable pro-poor growth
and inclusive social development. These are cross-sectoral objectives shared by the Government
of Pakistan (GoP). Policies in the sectors involved in the Landhi project are generally
compatible with ADB objectives, though there is some tension between competing objectives
within the GoP policy mix, as in the desire to indigenise technology, but also to provide low-cost
energy services to the poor.
Both organisations are committed to removal or price subsidies in energy markets, but this
process is incomplete, and at some short-term variance with the objectives of the GoPs pro-poor
social protection. It limits the energy sale options for the Landhi project in that second-tier
service provision, which is a suitable option for the quantity of energy that will be produced, is
compromised by lifeline block subsidy on power for the poor, who are dominant in the local
consumer profile.
The GoPs ability to operationalise its environmental protection policies is currently weak, but
there is no conflict with ADB objectives. The project will indirectly support the objectives of
both ADB and the GoP in providing some of the preconditions for improving health, creating
employment opportunities, especially for women and the poorest members of society.
The demonstration project will be managed by a benevolent NGO which will share profits with
the City District Government, in recognition of CDGs contribution of the land for the plant, and
with the community through a local management committee comprising representatives of local
stakeholders and civil society groups. There is an emerging consensus that establishment of
public health facilities is a high priority for use of profits. The project will therefore have
indirect positive impacts in this area of common concern to ADB and the GoP.
4.6.1

Implementation Arrangements for the Pilot Plant

At time of writing, the City District Government of Karachi has provided written assurance to
the NZAID-funded proponents of the pilot project that land will be made available for this
purpose. Details of the implementation arrangements and institutional structure remain to be
negotiated in an MOU. Without prejudice, it is expected that roles and responsibilities will be as
follow:
1. The New Zealand Government gifts demonstration plant equipment to SEEICCK, as
stakeholder for economic and environmental improvement on behalf of the community
2. The City District Government of Karachi grants free access to an identified four-acre plot
of land for the purposes of piloting conversion of cattle waste to energy and fertiliser.
Discussions continue as to whether access to the land may be extended to a commercial
CNG station operator.

41
3. A Management Board will be formed comprising representatives of the City District
Government of Karachi, SEEICCK, the farmer organisations and other community
groups with an interest in employment in the demonstration enterprise.
The demonstration plant is being funded by NZAID with the specific aim of enabling residents
to participate in an enterprise that would create employment, clean up their environment and
generate data to optimise an up-scaled project that would accept all the available cattle dung.
There are no necessary linkages between the ownership and management structure of the
demonstration project and that of the scaled up project, though the institutional and regulatory
hurdles that have been cleared for the demonstration will enable a proponent for the larger
project to slipstream on the earlier experience. It is hoped that the larger project will inherit and
develop the good relations that have been established with the farmer and other community
groups, and will embrace the same goals of community beneficiation as well as sustainable
business development.

The Proposed Full Scale Project

This project proposes the construction of a large-scale industrial biodigester, to accept and digest
up to 8,000 tons of cattle effluent per day and reduce the massive levels of local pollution, while
capturing and combusting greenhouse gases. The project will reduce local poverty and generate
significant quantities of energy.

5.1

Stakeholders

Stakeholder consultation has been ongoing with the grassroots beneficiaries and institutional
stakeholders at all levels since this project was identified in 1998. No stakeholder has identified
any potential negative impact.
The main institutional stakeholders are:

Alternative Energy Development Board (AEDB). AEDB is the endorsing agency for the
NZAID-funded demonstration assignment. Set up in May 2003, initially in the Prime
Ministers Secretariat, its location in the powerhouse of the bureaucracy signalling clear
government intent that its mission was to be taken seriously, and it has recently moved to the
Ministry of Water and Power to provide it with proper institutional depth and support. The
main goal assigned to the AEDB is to increase the use of renewable energy resources and
technologies originally to 10% of supply by 2015, now revised to 5% by 2030, and to
improve energy security through utilisation of indigenous resources. AEDB looks to Landhi
as a significant sized project that exemplifies its objectives.
Asian Development Bank (ADB). ADB has actively assisted this projects development
through PREGA TA 5972-REG. Its interest is in the potential for greenhouse gas abatement
at Landhi, and replication of the waste-to-energy scheme at other sites in Pakistan and the
region. Downstream, there is potential for extension of the concept to municipal solid waste
(MSW).

42

Bin Qasim Town Nazim. He is the elected mayor of the Bhains Landhi cattle colony area.
A staunch supporter, member and founding father of SEEICCK, and Vice President of Dairy
Farmers Association, Karachi.
Karachi City District Government Nazim and Executive Development Officers (EDOs),
Investment Promotion, Revenue, Agriculture and Forestry, Social Welfare. The Nazim
is the elected local body representative (mayor). The EDOs head the local government
administration for metropolitan Karachi. As such, they have responsibility for infrastructure
and services for the city and its environs, and control land use.
Dairy Farmers Association, Karachi (DFAK). The Dairy Farmers Association was
founded early in the life of the Colony as a pressure group for farmers. It has been the most
significant civil society group in the colony since then. Its main activities are to set the price
of milk for the Karachi market, and to advocate for the welfare of the residents of the colony.
Energy Adviser to the Prime Minister. The Energy Adviser is independent of the
bureaucracy. His office is currently formulating a National Energy Plan, as well as
supervising the formulation of the renewable energy development strategy. The Energy
Adviser endorsed the waste-to-energy concept and requested information about the potential
to enable its inclusion in the National Plan.
Environmental Protection Agency, Government of Sindh, Office of the Director
General. The EPA is empowered to regulate development activities to ensure conformance
with environmental law. The office has been an enthusiastic, indeed impatient, supporter of
the concept since its introduction, and has offered to facilitate passage of the pilot through the
regulatory maze.
International Union for the Conservation of Nature (IUCN). Identifies the problem, and
matchmaker between ECL, government veterinary officials, civil society groups, and
residents of Landhi, IUCN will have no direct involvement, but is recognised as a
stakeholder for its foresight.
Karachi Dairy Farmers Association (KDFA). A second farmer organization set up
because the original DFAK (qv) had become large and unwieldy, was not registered, and had
become politicized in a manner distasteful to some members. KDFA and SEEICCK
membership overlaps. Both farmer organizations wish to participate in the waste-to-energy
project.
Karachi Electricity Supply Authority (KESC). Power generator and distributor in the
metropolitan area of Karachi. KESC suffers from inadequacy of supply and is under
constant criticism, on occasion expressed in riots and attacks on its offices, for the frequent
scheduled and unscheduled interruptions to electricity supply. Is eager to increase quality
and quantity of supply, and has recently had the private sector take over its management
control.
National Electric Power Regulatory Authority (NEPRA). NEPRA has responsibility for
licensing all generation facilities over 50 MW. Below this level, regulating generation is the
responsibility of the provincial and municipal authorities, in this case the City District
Government, formally KMC (see below). NEPRA will, however, be kept informed about
this assignment, since the pilot is expected to start the process of smoothing the way through
the regulatory process for the scaled-up project to follow. NEPRA has indicated inclination
to recognise biogas as a renewable fuel. This is favourable, since the price at which biogasgenerated electricity would be purchased would not be bound by the tariff that applies to
natural gas-based generation.

43

National Fertilizer Development Council (NFDC). A FAO partner organisation. Provides


oversight to the national fertiliser market and directions and policy. NFDC supports the
promotion of organic fertiliser use, in part for its ability to reduce dependence on imported
urea, as well as the soil conditioning benefits of organic fertiliser products.
Office of the Chief Minister, Sindh. Responsibility for local government affairs, including
public land allocation to the City District Government, makes the office of the Chief Minister
crucial in the development of project plans. Fully briefed in late 2005 by Empower
Consultants staff, this office facilitated grant of four acres of land for use by the
demonstration plant.
Oil and Gas Regulatory Authority (OGRA). Based in Islamabad, this office is tasked with
ensuring the smooth operation of the natural gas market in Pakistan. Set up in 2002, OGRA
has been fully briefed, and has stated its full co-operation in accepting the gas from the
project if requested.
Pakistan Agriculture Research Council (PARC). PARC has a mandate to research and
develop ways to increase agricultural productivity. Like AEDB, it has a strong focus on selfreliance and utilisation of indigenous resources. It has developed and deployed fertigation
techniques, based on liquid or liquefied cattle shed effluent. It is interested in the possibility
of spin-off benefits for crop farmers by reducing their reliance on chemical fertilisers,
improving soil condition, and reducing costs. PARC has developed a compost-based
fertiliser which it states sells well at Rs 20 per kg.
Pakistan Council for Renewable Energy Technologies (PCRET). PCRET is a research
and development organisation. It is the focal point for PREGA in Pakistan. PCRET has
installed some hundreds of household scale biodigester throughout the country.
Pakistan Armed Forces. Because the Army runs a number of cattle colonies around the
country, and has a cantonment close to Landhi, it will be invited to observe. Since it is
usually well resourced, and has technical skills, and needs energy for its operations, it may
become a vehicle for replication elsewhere in the country.
Planning Commission. Assigned with formulation of a national development plan and the
review of project implementation plans with a particular emphasis on major schemes. This
office was consulted to ascertain how this project sat with their future priorities. No areas of
disagreement arose.
Private Power and Infrastructure Board (PPIB). PPIB like NEPRA, will be consulted
during the pilot identification of issues related to scaling up for the follow-on project. The
PPIB is responsible for fostering private power investment, and proposes the conditions for
purchase of power from non-government generators. At present IPPs are paid considerably
more for their power than the cost of publicly owned generation.
Society for Economic and Environmental Improvement of Cattle Colonies, Karachi
(SEEICCK). This NGO was registered under the Voluntary Social Welfare Societies Act in
September 2002 as a special-purpose vehicle to pursue amelioration of conditions at Landhi,
and by extension in the other smaller cattle colonies around Karachi. At the time of writing,
its Board is due for re-election. Candidates are Syed Abu Ahmad Akif, professor at the
College of Public Administration, Additional Commissioner and original concept champion
in the Office of the Commissioner Karachi in 1998, Mrs Zerfishan Alba, a representative of
the Sindh Government Department of Social Welfare, Haji Syed Saleem, a progressive and
educated farmer, and Yousuf Mujahid, a benevolent businessman who grew up in a farming
family in the colony and is now resident in Karachi. With the blessing of the farmer

44
organisations, SEEICCK will manage the pilot enterprise to be created in the NZAID-funded
demonstration project currently underway.

5.2

Alignment with ADB and other ODA Funding and Programmes

Funding for the demonstration phase of this project was granted by the New Zealand Agency for
International Development in November 2005. The focus of this fund is poverty alleviation,
with environmentally sustainable development as an ancillary focus. AEDB is the Government
of Pakistan endorsing agency for the NZAID preparatory project, which will generate technical
data to assist planning of the up scaled plant, establish the mechanisms for collection of dung and
distribution of energy and fertiliser, and train and employ local poor to participate in benefits.
The focal point for PREGA, PCRET has worked on household-scale biogas digester
development, but has not undertaken work in the field on this scale. PCRET has expressed a
wish to join at any stage in the development of the Landhi project, and is willing to participate in
training local operators during the implementation phase of the pilot project.

5.3

Goal, Objectives and Outputs of the Pilot Project

The goal of the project is the economic and environmental improvement of conditions in the
cattle colonies of Pakistan.
The main project objectives are to use cattle waste to create energy, fertiliser revenues and
enhance employment, especially for the poor, and to start to reduce the massive global
greenhouse gas emissions and local environmental degradation caused by the huge quantities of
currently dumped cattle waste.
Outputs will be:

a waste treatment plant, with gas used directly, or for CNG production or power generation
an organic fertiliser plant
if financially feasible, a waste water treatment plant.

Expected short-term outcomes, related mostly to the demonstration phase are:

Improved local energy supply, 200 kW of electricity or the equivalent in CNG


Greenhouse gas abatement of around 12,000 tons CO2 equivalent per annum
Availability of around 5,200 tonnes of high-grade organic fertiliser per annum
Creation of unskilled jobs that will benefit the poor
Improvement and greening of a public space around the demonstration plant.

Expected longer-term outcomes that will follow the up-scaled project are:

Removal of most of the untreated cattle waste from the local environment
Availability of an additional 19 MW to 30 MW of electricity
Greenhouse gas abatement exceeding 1,000,000 tonnes CO2 equivalent per annum.

45

5.4

Improvement in marine coastal environment


Reduction in fresh water demand
Reduction in power demand
Large-scale job creation
Availability of around 525,000 tonnes of high grade organic fertiliser per annum
Improvement and greening of a public space around the up-scaled installation.

Poverty Reduction and Millennium Development Goal Impacts

The project will assist Millennium Development Goals as discussed in the table below:
Goal
Goal 1: Eradicate
extreme poverty
and hunger
Goal 2: Achieve
universal primary
education
Goal 3: Promote
gender equality
and empower
women
Goal 4: Reduce
child mortality

Goal 5: Improve
maternal health
Goal 6: Combat
HIV/AIDS,
Malaria and other
diseases
Goal 7: Ensure
environmental
sustainability

Project Impacts
The project is located in a traditional place of refuge from natural or other disasters.
Katchi abadis surround the project area, recently swelled by people who have been
forced to abandon homes and livelihoods destroyed by the October 2005 earthquake
in Kashmir. The project will offer jobs that they are capable of performing.
Demonstration project management is committed to returning profits to CBOs, at least
four of which run primary schools for refugee groups in the area. Refugees are at
great risk of missing out on basic education and health services. The project will
indirectly assist this endeavour.
The project managers have committed to creation of jobs, specifically for women,
stitching and printing sacks for fertiliser. Three CBOs in the area have womens
industrial homes in which the women can undertake this work without breach of social
norms. This will enable them to gain value and respect as cash contributors to their
household economies.
No direct impacts, though improvements in household incomes and mother and child
wellbeing should accompany the general uplift of the area. Demonstration project
managers are committed to using profits to establish a Basic Health Unit in the area.
Environmental conditions will assist general health improvements.
No direct impacts, though the womens industrial homes are able to accommodate
womens health needs better than a conventional industrial workplace environment
No direct impacts. Reduction in pools of stagnant, cattle-waste laden water will reduce
breeding grounds for mosquitoes. Removal of dung from the environment should
reduce the fly population. Workplaces can serve as information dissemination centres
for public health messages
This project will turn an environmental disaster into profitable products for which there
is great need and demand. All institutional stakeholders acknowledge the seriousness
of current degradation and the elegance of the solution. This has only been inhibited
in the past by institutional incoherence. Once established through the project, wasteto-energy policy and procedure will take its place in the institutional and regulatory
framework as a policy encouraged by the Planning Commission and administered
through NEPRA and OGRA in the usual way. Once institutionally stabilised, there is
no reason why it should not be environmentally sustainable. The fertiliser will be
promoted through NFDC as part of its normal functions. The product can be handled
through normal commercial channels. No new institutions or procedures are required
to maintain this activity, which should improve environmental sustainability in its
contribution to improving soil conditions, moisture retention, and improving
effectiveness of smaller quantities of inorganic fertilisers.

46

5.5

Technology Transfer

Biogasification is not generally a technically complex process but must be correctly managed to
operate effectively. However this will be new to Pakistan at the scale involved in this project.
The steps involved are essentially:
1. Waste collection. Mostly likely a mix of mechanised collection trucks and perhaps
animal drawn carts for adjacent farms.
2. Waste preparation. Dung must be mixed to form slurry of around 8 to 10% solids for
efficient decomposition.
3. Decomposition. The slurry is introduced into an airtight vessel (the digester) where the
biological components degrade anaerobically to produce methane, carbon dioxide and
small amounts of hydrogen sulphide.
4. After an amount of time residing in the digester, a period referred to as the hydraulic
retention time, the slurry is pumped out and dewatered to separate the solids and the
liquids.
5. Solid components are the fertiliser, which are further dried, packaged and shipped.
6. Liquid components can be refined to create liquid fertiliser products, or when further
treated allow a benign release into the environment.
7. Gas is extracted from the top of the digester. This gas is approximately 65% methane,
34% carbon dioxide and 1 % hydrogen sulphide. Final results may yield methane
concentrations as high as 70%.
8. The gas is scrubbed to remove hydrogen sulphide, and also carbon dioxide if required. It
is also dried and filtered ready for use.
9. The end use may involve direct combustion for local industry (boilers, etc.), power
generation/cogeneration, or compression and sale into a pipeline or as CNG.
Thus all components and procedures required are well established and tested. Standard training
and support for equipment imported, where necessary, will be required, but given that off the
shelf power generation, pumps, filters and control equipment will be used, no unusual barriers
to the process of technology transfer or capacity building are expected.

5.6

Core Business of the Proposed Project Partners

Core business partners in the pilot project are SEEICCK, the community representative NGO
and a special purpose vehicle to ensure that the community are represented and accommodated
where possible. Local government, in terms of their ability to provide public land for use by the
project is an important partner, and also in their mandate to ensure the activities undertaken in
the areas under their jurisdiction are undertaken in compliance with the law. The project investor,
be it a bank, environmental investor or development institution is an obvious partner. Their
intention of securing a return on their investment may embrace social and environmental
improvement also.
Commercial participants in the pilot include sub-consultant engineers National Engineering
Corporation (Karachi) and Empower Consultants Limited (ECL) New Zealand. ECL identified

47
the project. Both organisations have developed the concept with the principal of SEEICCK since
1998, and retain an interest in participating in future project work in the engineering and project
management roles.
At this point in time the team is not aware of any financial relationships existing between any of
the partners listed.
The Alternative Energy Development Board introduces energy investors to renewable energy
projects for which pre-feasibility or feasibility studies exist, and is identifying interest in full
scale development of the Landhi project.

5.7

Products and Services to be generated by the Project

The project will produce products and services in a commercial, social and environmental sense.
Broadly these are:
1. Commercial products will include various forms of energy, such as natural gas in compressed
or uncompressed form, electricity, process heat and pressure, either directly as produced by a
boiler or as the result of cogeneration plant operation. GHG emission reductions as CER
credits will be a key further commercial output of the project. Organic fertiliser will also be a
commercial product. A commercial application for the grey water from the plant may also be
found; otherwise it will be used for environmentally beneficial fertigation.
2. Socially, the results are expected to include a dramatically improved living environment
through the removal of massive amounts of dung from the streets and waterways.
Employment is expected to improve, directly as a result of the demands to operate the plant,
supply the dung and bag and transport the fertiliser, but also as a result of possible improved
investment in the area from other commercial activities to support the plant, equipment and
population.
3. Pure methane has energy content of 1,000 British Thermal Units (Btus) per cubic foot,
equating to 35,000 Btus per m3, or 37 megajoules (MJ) per m3, or 0.037 gigajoules (GJ) per
m3. Therefore, given a daily production of 196,000 m3 methane per day, the daily energy
output from the digester will be in the vicinity of 7,260,000 MJ per day. At 28% conversion
efficiency and ignoring scope for co-generation and downtime for maintenance, this would
equate to 564 MWh per day. Given that the farming activities continue year round, there is
unlikely to be great seasonal variation in gas production beyond the impact of variations in
ambient temperature and possibly in cattle diet, depending on seasonal crop rotations. These
variations will be monitored during the operation of the pilot project to provide hard data
input to the feasibility stage of the full-scale project analysis.
4. The forecast energy output figures use-estimated data for the production of gas. This is
primarily due to the non-availability of data on the calorific content of the raw dung, but also
includes other process variables, such as ambient temperature fluctuation at the project site
and water quality. Slightly conservative estimates have been used in the calculations
undertaken. Calculations are based on 196,000 m3 at this stage.

48

5. The GoP is actively wishing to facilitate investment in the power sector. Demand for energy
is high and a ready market exists for both electricity and gas. Energy theft is a recognised
problem in Karachi; however, and an automatic link cannot be drawn between demand and
willingness and ability to pay.

Project Implementation Plan

The pilot project required to generate the empirical data needed for the large-scale project is
already underway. News of the demonstration plant is arousing investor interest in the scaled-up
plant to follow. Having commenced in November 2005, construction on site is expected to be
completed by mid-2006, and commissioning in late 2006. It is expected that this plant will be
operated for 12 to 24 months to ensure the validity of the data generated, after which the detailed
design of the large-scale plant can follow.
Much of the political consultation has already been initiated and conceptual agreement reached
on the key aspects of the project, thus major delays are not expected in this area. Nevertheless it
would be imprudent to assume an uninterrupted process. Taking this into account, it is not
unrealistic to expect planning to commence in late 2007 with construction in 2008. Tasks such
as identification and securing of public land can be done in parallel with the pilot project
operation and monitoring, so the areas of project planning most open to delays or external
influence can be provided the maximum time for completion.
Once commissioned, the plant can have an operational life measured in decades. Fifty years is
not unrealistic for most concrete wastewater structures, while other components, such as gas and
electricity systems will require more regular scheduled maintenance and periodic replacement.
Corrosion initiated by the hydrogen sulphide gas present in the raw biogas is a prime factor of
concern. Careful scrubbing of the gas will remove most, if not all, traces of sulphides.

Contribution to Sustainable Development

The project can be expected to have a dramatic impact on the sustainable development of cattle
farming in the Landhi area. As described earlier, the ongoing environmental damage is massive,
and directly impacting on fishing industries on the coast as well as degrading the general social
and business environment in Landhi. Simply put, Landhi is not a location where one would live
and raise a family by choice. Removing the waste from the environment will significantly
improve this situation.
Employment was a central concern noted in a Landhi community survey undertaken by
Empower Consultants Ltd in 2002. The initiation of this waste-to-energy plant will create jobs
for the unskilled and raise income levels, particularly for the higher skilled work required in the
project. In addition, the improved living, working, and investment climate (less effluent, flies,
odour and dust, etc.) made possible by the presence of the plant may also improve employment
statistics in the Landhi area.

49
There is considerable scope for the replication of this project, not only in the other cattle colonies
in Karachi and elsewhere in Pakistan as noted earlier, but also in the wider field of solid waste
management in Pakistan. Landfill gas or municipal solid waste biogasification development is
very similar to the processes required for the biogasification of cattle effluent, and the capacity
building and skills transfer provided in the Landhi project will find an application in municipal
waste-to-energy projects once the concept has been proven, firstly in the pilot project, and
subsequently in the large-scale plant.

Project Baseline and GHG Abatement Calculation

The calculation of greenhouse gas emissions is calculated using the UNFCC Approved baseline
methodology AM0006 Greenhouse Gas Emission Reductions from Manure Management
Systems

8.1

Baseline Scenario

The situation at Landhi cattle colony presently comprises:

The open dumping dung into open land or waterways, in a manner not in compliance
with national laws.

Direct release of emissions into the atmosphere, with no attempt at capture or


combustion.

The AM0006 methodology is applicable to the Landhi cattle colony situation as most conditions
specified are satisfied in Bin Qasim and Landhi cattle colonies. Specifically, these are:
1. The project context is represented by farms operating under a competitive market;
2. The manure management system introduced as part of the project activity, as well as the
manure management system in the baseline scenario, must be in accordance with the
regulatory framework in the country;
3. Livestock populations are managed under confined conditions. Barn systems and barn
flushing systems should neither be the baseline scenario nor the project activity;
4. Livestock populations comprise only cattle, buffalo, or swine;
5. The manure management system introduced as part of the project activity, as well as the
manure management system in the baseline scenario, may consist of several stages of
manure treatment, including all options (or a combination of them) listed in Step 1 under
additionality, but excluding the discharge of manure into natural water resources
6. The project activity does not lead to a significant increase in the consumption of
electricity.
The scenario at Landhi is not directly covered by the approved methodologies researched to date.
Specifically, as raw dung is presently discharged directly into existing waterways, Point 2 above
cannot be complied with; however, the project activity will prevent further dumping and thus it is
considered that the intent of the methodology is sound and complied with.

50
The baseline scenario at Landhi could be assessed in a variety of ways. The most financially
attractive method is the simple dumping of raw dung into the local waterways. While illegal,
and not in compliance with Point 5 of AM0006, this nonetheless is the point from which this
project starts. This dumping of dung is essentially an anaerobic treatment system, as the
biological oxygen demand in local waterways is extreme. An estimated 10% of dung volume is
also dumped onto vacant land and left to dry. This is covered under the methodology as dry lot
processing, where dung is dried and later spread on fields.
There is a market for dung in the farms outside of Karachi, but the value of the unprocessed dung
is low and truck owners refuse to carry the raw dung in their trucks. Wet dung is around 80%
water and needs specific loading and carrying systems to transport. These are not currently
available in the project site, as no financial incentive exists to support their operation.
Thus, for the purposes of baseline analysis a combination of 70% anaerobic digestion and 30%
dry lot handling is assumed. While obviously the most environmentally damaging, it is the most
realistic option given no enforcement of dumping laws and no existing waste processing
transportation or treatment facilities.

8.2

Additionality

Carbon credits are generated by changing the manner in which raw dung is handled, and how
emissions from decomposing dung are captured and used. The methodology suggests that more
than one possible way should be considered for the handling of raw dung. Since the Landhi
project considers the capturing of dung and methane to provide saleable products, only anaerobic
treatment methodologies are considered as the primary treatment technology. These are:

Anaerobic lagoons.
Anaerobic digester
Aerobic treatment.

Given that the anaerobic treatment stages will result in large volumes of nutrient-rich waste
water, it is expected that aerobic treatment of discharge water will also be necessary, perhaps
prior to the recycling of water back to the start of the anaerobic digestion process. For this
reason a combination of technologies may be utilized.
In the project site there is presently no formal waste management system for animal manure
whatsoever. No formal dung collection mechanism exists and, in many cases, farmers pay
informal dung collectors to remove dung from the farm lots and dump it elsewhere, usually onto
open land or into local waterways and open drains. Options for the disposal of dung are
constrained and in general farmers feel that they are unable to comply with laws relating to the
correct disposal of dung.
Since the scope of this project does not include the construction of a complete piped and pumped
sewage collection mechanism, the proposed methodology must be able to cope with raw dung as
an input.

51

8.3

Identification of Plausible Scenarios

It is plausible to consider several options for the handling of raw dung, including:

Aerobic treatment in aerated lagoons. Dung can be collected by truck and transported to
lagoon sites where it is mixed with water to form slurry, then pumped and circulated in
open lagoons prior to release.
Composting. This can produce a high quality fertilizer for sale. Trucking of dung to the
compost facility is also necessary.
Anaerobic digestion. Raw dung is collected by truck and transported to the digester,
where it is mixed into slurry and pumped into the digester for 30 to 60 days, depending
on temperature. For Landhi, the pilot stage will allow accurate assessment of the optimal
retention time and temperatures once the data is available.

More traditional urbanised methods for the collection and treatment of raw dung are not realistic
in Landhi. There is no existing, functional model to follow in Landhi. Not even human waste is
collected or treated prior to discharge in the district. There is also no sewage network in place to
bring waste to a single point for treatment, thus trucking of raw dung is the only existing option
given that the massive investment required to construct such a network is not likely to be
forthcoming from the local government, and is not seen as necessary from a private sector
perspective.
Since the dung is to be collected and trucked to a single point, all three plausible scenarios share
the same overheads in terms of collection.

Costs and Benefits


Equipment costs

Aerobic Lagoons

Composting

Anaerobic Digestion

20,000,000

30,000,000

60,000,000

Installation

5,000,000

5,000,000

5,000,000

Maintenance

3,000,000

3,000,000

3,000,000

Misc. costs

2,000,000

2,000,000

2,000,000

Energy sales

0.0

0.0

11,700,000

Fertiliser sales

0.0

2,800,000

2,070,000

Negative

4.5%

32.1 %

45,000,000

14,700,000

US$ 206,311,000

Annual revenues

IRR
NPV

A discount rate of 5% has been used in all scenarios.


Anaerobic digestion is the most viable option from an economic perspective. The baseline
activity is essentially neutral from a financial-only perspective as it has no direct cost and no

52
revenue. This, of course, ignores the environmental and social costs, which are significant but
not numerically quantified.
As stated in the approved methodology, the project activity consists of the implementation of an
advanced manure management system that leads to less GHG emissions than the manure
management system that would be used in the absence of the project activity.
The baseline scenario results in open and significant emissions of methane from anaerobic
digestion of manure in open waterways leading into the ocean. The project activity will capture
this dung and digest it under anaerobic conditions. Methane will be captured and combusted and
fertiliser will be separated and sold.
The primary greenhouse gas to be reduced through the primary project activity is methane, CH4.
This is specifically noted as an accepted emission under methodology AM0006.
To make specific calculations regarding the gas outputs requires field-testing. The pilot stage
planned for installation in late 2006 will provide the empirical data needed to further refine the
baseline and project activities.
The project baseline is taken as the status quo, being the continued dumping of 7,200 tons of raw
dung into the local environment each day. The environmental damage is under evaluation now
and will form the baseline survey that future studies can be referenced against. Specifically, the
baseline sampling includes water consumption and power consumption rates on sample farms as
well as stream and coastal water quality. Numerical representation of the baseline will be
available prior to the commencement of the project, and limited baseline data became available
from March 2006 as a result of work undertaken during the pilot stage.

8.4

Flowchart of the Current Delivery System

The pilot installation will comprise a series of steps, illustrated in the block diagram that follows.
The large-scale installation is essentially the same process but is likely to be more heavily
mechanised to cope with the massive quantities of material involved.
In the first stage of the pilot, approximately 80 tons per day of wet dung will be received from
local transporters and mixed in batches with an equivalent mass of water. The resulting slurry
will be approximately 9% solids and easily pumped into the digester. Once in the digester, the
mix will be kept moving via a series of reticulation pumps and blowers. Given that each day 80
tons of dung and 80 tons of water are introduced into the digester, and a hydraulic retention time
(HRT) of (say) 35 days is expected, the digester volume can be expected to be not less than 80 +
80 = 160 m3 x 35 = 5,600 m3, compared to the final project, which is likely to exceed 420,000
m3. This figure will either increase or decrease, depending on the results of the temperature
recordings as these impact on the speed of decomposition, and therefore, on the HRT.

53

Gas production

Anaerobic Digester
60% methane
40% carbon dioxide

Biogas is scrubbed and


CO2 + H2S is removed

Scrubbing

Drying

Pure methane gas is


dried to remove water
vapour

Compression

Pure, dry methane gas is


compressed for use

Electricity
plus heat

Bottled gas for


cooking and
heating

Organic fertiliser

Hydroponics

Steam
and/or ice

Each day 160 m3 of slurry is extracted from the opposite end of the pilot digester. This slurry is
hosed over a gravel/sand bed to separate the solids from the liquids, which drain through the
sand into a holding tank. The dewatered solids are then able to be shovelled or mechanically
scraped into the next stage, which will to air-dry the solids to the consistency of damp compost,
ready for bagging and sale. The liquid waste can be handled in a variety of ways, depending on
the final use. It may be evaporated to form a concentrated liquid fertiliser, or used as is as a
nutrient supplement for irrigation on fields.
Covering the top of the digester is a plastic membrane that forms an airtight barrier capturing gas
emissions from the surface of the composting slurry. Comprising approximately 65% methane
(CH4), 34% carbon dioxide (CO2) and 1% hydrogen sulphide (H2S), this gas is classed as wet,
sour gas due to its high humidity and the presence of a high CO2 and H2S component. Despite
this, it will readily combust if ignited, but requires further filtering and scrubbing to remove the

54
CO2 and H2S for commercial use. In particular, the H2S is most problematic as it is corrosive
and foul smelling.
Thus, the gas is extracted from the canopy above the digester and pumped through a simple filter
of rusted iron shavings. The ferrous oxide traps the sulphur according to the following reaction:
FeO + H2S = FeS + H2O
Fe2O3 + 2H2S = Fe2S3 + 2H2O
The remaining gas is now wet (highly humid) and contains around 35% CO2. If the gas is to be
used for power generation on site, it requires only to be dried before use. This is done by passing
the gas over a refrigerated plate, allowing the moisture to condense out.
If the gas is to be compressed to CNG, the CO2 also needs to be removed. The process of
compression is expensive and only productive components of the gas mix warrant the investment
in terms of the energy required for compression. CO2 can be removed via a variety of methods,
but for a low-volume application the simplest method is to wash the gas with water, and allow
the CO2 to be absorbed, leaving the methane behind. This is the most likely process to be
followed in the pilot if it is decided to use the energy as CNG. The resulting gas is now clean
and dry and ready for either combustion or compression.
The basic design parameters calculated thus far, given available data are summarised in the
following table:
Table 2: Waste-to-Energy Calculations, both Solids basis and COD basis
Digester
Daily Sludge Volume
Total Digester Volume
HRT
Loading
VSS Destroyed
Gas produced
Methane Produced
Heat Produced
Electricity Generated

Solids Basis
7200
768000
106.7
1152000
576,000
432,000
18,000
11,700
418,860
116,350
32,578

m /d
3
m
d
kgVSS/d
kgVSS/d
3
m gas/d
3
m gas/hr
3
m CH4/hr
MJ/hr
KW

Daily Sludge Volume


Total Digester Volume
HRT
Loading
COD destroyed
Methane Produced

KW

Electricity Generated

Biogas Produced
Heat Produced

COD Basis
7200
480000
66.7
720,000
360,000
90,000
3,750
5,769
206,538
57,372
16,064

m /d
3
m
d
kgCOD/d
kgCOD/d
3
m CH4/d
3
m CH4/hr
3
m gas/hr
MJ/hr
KW
KW

Electrical output is estimated to be between 16 and 32 MW, and a figure of 24 MW has been
used for the basis of calculation until some key process variables can be determined more
accurately.

55

8.3

Status, Adequacy and Operation Modes of the Baseline

Baseline data are under analysis with the Pakistan Council for Scientific and Industrial Research
as at January 2006. Empower Consultants Limited will undertake additional research and
analysis of the chemical breakdown of raw dung samples and water quality samples from various
points around Landhi to act as a cross-reference to the PCSIR results. Prior to the large-scale
project getting underway this program of monitoring will be expanded under a structured
monitoring program to accurate plot and evaluate changes in the local environment following the
installation of the digester.

8.4

Baseline Methodology and Calculation of Baseline Emissions

The calculation of baseline emissions and possible carbon credits is based on the following
assumptions. The assumptions will be investigated during the course of the pilot project and
their accuracy challenged and amended, where necessary.
Firstly, it is assumed that only 70% of the raw dung dumped into the environment is composted
in one form or another, and that the methane is released into the atmosphere at some point. Most
of the dung is dumped into drains where the water is already saturated with organic material such
that the presence of oxygen is very low. The actual reading, referred to as BOD, or biological
oxygen demand, has been requested from the Pakistan Council for Scientific and Industrial
Research. A high organic loading, and therefore BOD, means that effectively decomposition in
the streams and waterways is anaerobic, or is occurring in the absence of oxygen. It is assumed
that 30% of the dung dumped into the environment is dried and lost to dust, or decomposes
aerobically. For this reason the baseline methane emission for Landhi cattle waste situation is set
at 70% of the amount as methane produced by the digester, being 196,000 m3 per day. One
cubic meter of methane weighs 0.717 kg; therefore, the waste at Landhi contributes 51,400 tons
of methane to atmospheric pollution per year.
Methane (CH4) is 21 times as harmful as carbon dioxide CO2 in terms of its global warming
potential (GWP). Therefore, the CO2 equivalent from methane is 21 x 51,400 = 1.08 million
tons CO2 per annum. Added to the 76,400 tons of CO2 also released and we have a total of
1,156,000 tons CO2 as a baseline CO2 emission level.
But the digester will have a much higher rate of capture and anaerobic digestion. It is assumed
that instead of a 70% rate of decomposition in the open, a 95% rate is likely if the dung is
collected and placed in the digester. At 95%, the digester produces a maximum of
approximately 410,000 m3 of biogas per day. Biogas is approximately 60% CH4 and 40% CO2.
Thus it can be seen that this corresponds to approximately 246,000 m3 CH4 per day and 164,000
m3 CO2. 246,000 m3 CH4 = 64,400 tons CH4 per annum. This is equivalent to 1,353,000 tons
CO2 per annum, + 164,000 m3 CO2, (or 118,000 tons CO2 per annum) giving a total of
1,471,000 tons CO2 per annum if the dung is captured and combusted.
Thus we have 1,156,000 tons CO2 if the dung is dumped in the open, compared to 1,471,000 tons
CO2 if the dung is captured and digested.

56
Counter intuitively; combusting the methane produced reduces its potency as a greenhouse gas to
1
/21 by converting it to carbon dioxide according to the reaction shown below:
CH4 + 2O2 = CO2 + 2H2O
So, the 1.471 million tons of CO2 equivalent is reduced to only 295,000 tons of CO2 after the
relative molecular weight differences between CO2 and CH4 are accounted for, and the CH4 is
combusted.
Added to this saving is that the combustion of methane occurs during the production of
electricity. This electricity production is added to the national grid and hence reduces the need
for gas combustion elsewhere of an equivalent quantity. CO2 released from the digester and
from the combustion process is balanced by the demand for CO2 by the foliage and crops grown
and supplied as fodder to the cattle.
Thus the 1,156,000 tons CO2 is reduced to only 295,000 tons CO2, a saving of 861,000 tons per
annum. Added to this are the avoided CO2 emissions of 176,000 tons CO2 per annum from
power generation elsewhere in Pakistan, and a total of 861,000 + 176,000 = 1,038,000 tons CO2
savings per annum is possible.
At a conservative estimate of US$ 5 per ton of CO2 abated, it can therefore be seen that the value
of carbon credit savings would be in the order of US$ 5.2 million per annum.

8.5

Calculation of Total Project GHG Emissions

Net total GHG emissions have been assessed by the following process:
1. Calculation of the total CH4 and CO2 emissions for the status quo (dumping of raw dung) and
secondly for digestion and combustion of the CH4.
2. Converting CH4 emissions to a CO2 equivalent by multiplying by 21 and adjusting for the
respective molecular weights of CH4 and CO2 in order to give a comparative tonnage.
3. Calculating the total CO2 emissions from the digester if all methane is captured and
combusted in a power generator that is also producing electricity.
This provides a preliminary estimation of the baseline emissions of undertaking the project or not
undertaking the project. As per the calculations above, the emissions expected by implementing
the project are 1.25 million tons per annum less than if nothing is done at all (the baseline case).

8.6

Net Emission Reduction

Net emissions have been assessed by subtracting the net project emissions from the net baseline
emissions, thus yielding the 1.038 million tons of avoided CO2 (equivalent) per annum.
The primary risk to the accuracy of the baseline estimates resides in the decomposition
characteristics of the dung as it is dumped into the open, or into Landhis waterways. If the
estimate of eventual 70% decomposition is inaccurate, then the baseline figure will change.

57
Additional research into this is required to better understand the decomposition characteristics of
raw dung in the Landhi environment to more accurately assess the CH4 and CO2 emissions.
Additional uncertainty is present in the estimate of total gas/energy production of the project,
although given that the bottom of the estimation range was used, it is likely to see total energy
output revised upwards and not down. Nevertheless, until empirical and repeatable results are
achieved in the pilot plant, and laboratory results on the analysis of the feedstock are complete
and available, the actual energy figures are unable to be confirmed and variation is likely to
change the estimates made in this study.

GHG Emission Reduction Monitoring and Verification

Pakistan is presently in the process of formulating and formalising its GHG monitoring and
verification procedures. It is expected that these will be published and available for application
to the project well before implementation, and it is hoped that they will be able to be trialled in
the course of the pilot project late in 2006.

9.1

Identification of Data Needs and Data Quality

Though the feed composition of Landhi cattle is well known and fairly consistent year-round,
there are little data available on the composition and characteristics of the dung. This situation is
being remedied as explained above.
Specifically, data are required on the dung in order to assess its value as a gas-producing
feedstock, and also to assess its value as an organic fertiliser once it leaves the biodigester
process.
For biodigestion, the volatile organic compounds (VOC) in the dung are a critical measurement,
and accurate estimates of total gas production can be made once this factor is understood.
Other measurements include the biological oxygen demand (BOD) of water samples in and
around Landhi to benchmark and monitor the changes in environmental loading as the raw dung
is diverted away from the environment and into the digestion process.
For fertiliser, the total nitrogen value of the fertiliser is of prime importance to farmers; typically,
biodigester slurry contains around 1.4% readily available nitrogen which is often lost if it is
composted in the open. Composted fertiliser from the biodigester has a higher nitrogen count
than dung that is dumped, or buried and composted in open pits. In this situation nitrogen is lost
to the atmosphere in the form of ammonia. Cow manure contains appreciable amounts of
nitrogen, which will be converted to ammonia in the digester as described. Most of the ammonia
will accumulate in the digester material and will become toxic if not controlled. Ammonia
toxicity is a major concern in the anaerobic digestion of livestock manure and is a risk to be
controlled in the project. Experience with this will be gained in the pilot stage. An ammonia
concentration of 1,500 parts per million (ppm) is considered the maximum allowable for good
methane production and above 3,000 ppm it becomes toxic. Balancing inputs into the digester

58
can control this risk by keeping concentrations within limits. Waste newsprint or other cellulosic
material can be introduced to manage concentrations.

9.2

Methodology Used for Data Collection and Monitoring

The monitoring process is regarded as vital in order to verify and track project impacts. These
are anticipated to be a positive and powerful factor in overcoming possible resistance or concerns
encountered with district authorities in other parts of Pakistan. In addition, verifiable emission
data are required for claiming carbon credits under CDM provisions, and hence must be an
integral aspect of project planning and operation.
An independent accredited laboratory, such as PCSIR, will be used in the gathering and analysis
of the dung and water samples. The results will be compared with samples and analysis
undertaken at the pilot stage to provide a backup set of data during the pilot and planning stage
for comparison and reference.
Training in the importance, procedure and database creation for monitoring data will be required
to ensure full compliance with CDM requirements, as well as non-emission related data needed
for other environmental baseline comparisons.
Specifically, data will be collected on the following points. This list may be expanded to
accommodate data needs required by the CDM Cell in Islamabad:
1.
2.
3.
4.

Total gas volume out of the biodigester.


Analysis of the gas to provide percentage breakdowns of CH4, CO2, and H2S.
Total electricity produced, or other final energy form produced.
Total energy consumed by the plant itself (i.e., pumps, blowers, mixers, and possible
heating loads)

Data will be collected primarily via direct metering, as is the case with gas volumes produced
(m3) or MWh in the case of electricity outputs or inputs. Gas content will be assessed either
continuously via automated online sampling sensors, or manually via a strict set of periodic
sampling and analysis.
Environmental and social impact monitoring will also form an important aspect of system
performance and data will be collected for this also. Of particular interest will be:

Employment and salaries at the installation, disaggregated by sex


Water quality, both coastal and in local fresh waterways
Standard environmental variables, including ambient temperatures and humidity.
Total fertiliser production and sales data
Total energy production and sales data
Evaluation of spin-off impacts, such as greening public spaces, quantitative if possible.

59

9.3

Estimates of Costs for Monitoring and Verification

Cost for monitoring and evaluation will vary depending on the final format for a monitoring and
evaluation program agreed, and the degree of automation and redundancy built into the system.
Labour costs in Pakistan are not high, but should an automated monitoring system be specified
then capital costs would be incurred at the commissioning stage. Given the scale of the project,
these are not expected to be significant.

10

Financial Analysis of the Project

A draft financial analysis has been done in accordance with the ADBs Guidelines for
Preparation of Financial Analysis. Some variables impacting on project output are yet to be
defined. Estimations are calculated below and are based on the master set of variables and
outputs provided in the following tables, with carbon credit income set at US$ 0, 3, 5 and 10/ton
CO2, respectively. Income tax is set at the preferential rate for renewable energy projects of 0.0
% and it is recognised that this may be reduced, depending on the final ownership structure of
the entity owning the facility, and on its capacity.
Assumptions have been made on the overhead and depreciation for the operation of the digester,
power generation and fertiliser production. These are summarised in the tables below.
10.1

Electricity Production

The model presented in table format provides an indicative view of predicted power output,
given the assumptions made on gas quality and volume. The net income streams are regarded as
conservative, particularly since after-tax income is used to evaluate the FIRR and NPV values on
the tables following. Simple straight-line depreciation to zero is also applied over a ten-year
period for the electrical generation and gas process equipment. FIRR and NPV values are
calculated over 20 years with full capital replacement after ten years.

60

Table 3: Financial Analysis of Electricity Production

Electricity
Rs/USD =
Daily volume of methane consumed
Energy value of methane
Net electrical output at 28% efficiency at
generator
Average electrical output, at 80% of max
Sale price of power
Gross annual income from power
generation
Fixed costs (station labour, 10 staff at an
average of USD 30,000 pa)

59

196,560
7,257,978.0

m CH4

564,510
452
5.03

kWh
MWh
Rs

0.085

829,126,505

Rs

14,052,992

USD

18,000,000

Rs

305,085

USD

Overhead
3,000,000
Depreciation per annum, straight line to zero
over 10 years
118,000,000
Gross annual expenses
139,000,000

Rs

50,847

USD

Rs
Rs

2,000,000
2,355,932

USD
USD

Average annual income from power sales


Less tax @ 0%
Net annual profit after tax
Profit as a percentage of gross project
revenue

Rs

11,697,059
0
11,697,059

USD
USD
USD

10.2

690,126,505
0
690,126,505

per day
per day

MJ

Rs

per day
per day

83%

Fertiliser Production

Fertiliser income and expenditure streams are based on the figures tabulated below. Key
assumptions include the mass of dung per day, percent dry weight of dung, and sale price
achieved.
A large number of workers have been included, primarily required to collect and return dung to
the digester. 70 x 10-ton trucks (70 trucks x 12 hours per day x 10 tonnes = 8,400 tonnes) are
also required for delivery of the up to 8,000 tons of dung to the digester each day. A sale price
of Rs 1.5 per kg for the final product, ex-factory, is assumed; however the actual value will
depend on yet to be evaluated nitrogen values and the added value of the product as an improver
of soil structure and releaser of inorganic fertiliser nutrients. Based on research on market values
for organic fertilisers in Karachi and Islamabad in November 2005, an ex-factory price of Rs 1.5
is considered realistic. Niche market product is available in garden shops for more than Rs 20
per kg, and Rs 1.5 is expected to compare favourably with bulk-supplied chemical fertilisers. In

61
addition, organic fertilisers have a soil conditioning effect that enhances urea chemical fertiliser
application results.
Table 4: Financial Analysis of Fertiliser Production

Fertiliser
Rs /
USD =
Number of cows
Dung/cow/day
Daily production
Dry weight @ 20%

400,000
18
7,200,000
1,440,000

59.0
USD

Sale price of fertiliser ex factory


Fertiliser sales per year, assuming all product is sold
Gross annual income

kg
kg
kg
Rs per
1.5
kg
788,400,000 Rs
788,400,000

0.025
13,362,712
13,362,712

Workers
Average daily pay rate
Annual labour costs

293
1,205
128,918,920

293
$ 20.43
2,185,066

No. Sacks/day (50 kg)


Cost of sack material at Rs 3 each,
Operating overhead allowed per sack @ 5 Rs
Depreciation on process equipment to zero over 10 years
Cost of dung at Rs 0.1 per kg
Gross annual expenses

28,800
31,536,000
Rs
52,560,000
59,000,000
Rs
394,200,000
666,214,920 Rs

Annual operating profit


Less tax @ 0.0 %
Net annual profit after tax
Profit as a percentage of gross revenue

122,185,080 Rs
0
Rs
122,185,080 Rs
15%

10.3

Rs
Rs

534,508
890,847
1,000,000
6,681,356
11,291,778
2,070,934
0
2,070,934

Carbon Credit Calculations

The production of carbon credits is based on the conversion of methane to carbon dioxide during
the process of combustion/power production. These figures require verification, particularly
with respect to the quantities of methane and carbon dioxide released in the status quo scenario.
These and other factors will be reviewed and improved on during the pilot project process.

62

Table 5: Greenhouse Gas Emissions

Greenhouse Gas impacts of Status Quo


m3

Daily volume of biogas produced


Allowance for percentage of dung that does not decompose to gas
Methane volume
CO2 volume

432,000
302,400
196,560
105,840

CO2 equivalent of methane @ 21 times ratio

21

Mass of methane at 25 Deg C


Mass of methane produced at 25 deg C per annum
Mass of CO2 at 25 Deg C
Mass of CO2 produced per annum
Equivalent mass of CO2 per annum from methane

0.717
51,441
1.980
76,491
1,080,255

tons/annum
tons/annum

Total Tons CO2 if dung is dumped and rotted @ 100% ratio

1,156,746

tons/annum

Greenhouse gas emissions if methane is captured and combusted


If the dung is digested, assume 95% gas conversion and capture
Total CO2 equivalent if dung is dumped
1,156,746
1 molecule methane creates 1 molecule CO2 when combusted
Total CO2 emissions from digester
118,638
Combusted methane converts to produce CO2
176,814
Total CO2 emissions from digester
295,453
Total carbon savings achieved via combustion alone
861,293

m3
m3

kg/m3

tons/annum
kg/m3

tons/annum
tons/annum
tons/annum
tons/annum
tons/annum

Since electricity produced offsets carbon emissions elsewhere


Methane quantity avoided elsewhere in Pakistan

176,814

tons/annum

Total carbon emission reductions

1,038,108

tons/annum

Value of 1 metric ton of carbon


Total value carbon per annum

$ 10.00
10,381,076

$ pa

63

Table 6: Carbon Credit Calculations with 0.0 % taxation


Master Variables Input

Master outputs

Number of Cows

400,000

Average dung quantity per cow per day

kg

Sale price of power per kWhr for natural gas

5.03

Rs

Cost of dung per kg

0.15

Rs/kg

1.5

Electrical conversion efficiency

196,560

m3CH4 per day

6,879,600,000

BTU's per day

Total volume of methane produced

18

Sale price of bagged fertiliser per kg

Carbon credits @ USD 0 per ton

Energy value of methane produced in one day


in megajoules

Rs

28%

7,257,978

MJ per day

Maximum electrical output

24

MW peak

Electrical output used in calculations 80% of max

19

MW

Exchange rate to US$

59

Rs

Maximum electrical output in MW

564.5

MWhrs/day

Rate of depreciation of power equipment

10

years

Daily electrical production at 80% of max

451.6

MWhrs/day

Tax rate applied to profit

0.0 %

Value of carbon credits per ton

Value of ex pipeline gas in Rs per MMBTU

$ 240.00

Total digester volume required


USD
$

Value of gas produced per day


4.14

Value of electricity produced per day

480,000

$
$

27,984.81

USD

38,501.35

USD

Project IRR
Project NPV

Capital costs
Complete biodigester, installed incl contingency

35,000,000

USD

Total amount of fertiliser produced

Power generation equipment

20,000,000

USD

Number of 50 kg sacks

Fertiliser process equipment

10,000,000

USD

Total land area required

Balance of system equipment


Total

5,000,000

USD

70,000,000

USD

Total CO2 emissions if dung is dumped


Total CO2 emissions if digested and combusted

Cubic meters CH4 eq of electrical output


Total CO2 emissions savings

70%

10,512,000
20

per annum
Ha

11,697,059

122,185,080

2,070,934

812,311,585

13,767,993

MT/annum

Net annual income from carbon credits

MT/annum

MT/annum

690,126,505

295,453
1,038,109

525,600

Net annual income from electrical


Net annual income from fertiliser

m CH4

USD

US$

MT/annum

176,814

119,736,545

Rs
1,156,746

18.3%

Master Financial Outputs

Carbon Credit Summary


Percentage of decomposition for dumped dung

m3

Total net income after tax

64

Master Variables Input

Carbon credits @ USD 3 per ton

Master outputs

Number of Cows

400,000

Average dung quantity per cow per day

18

kg

Sale price of power per kWhr for natural gas

5.03

Rs

Cost of dung per kg

0.15

Rs/kg

Sale price of bagged fertiliser per kg

1.5

Electrical conversion efficiency

196,560

m3CH4 per day

6,879,600,000

BTU's per day

Total volume of methane produced


Energy value of methane produced in one day
in megajoules

Rs

28%

7,257,978

MJ per day

Maximum electrical output

24

MW peak

Electrical output used in calculations 80% of max

19

MW

Exchange rate to US$

59

Rs

Maximum electrical output in MW

564.5

MWhrs/day

Rate of depreciation of power equipment

10

years

Daily electrical production at 80% of max

451.6

MWhrs/day

Tax rate applied to profit

0.0 %

Value of carbon credits per ton

3.00

Value of ex pipeline gas in Rs per MMBTU

$ 240.00

Total digester volume required


USD
$

4.14

480,000

Value of gas produced per day

28,467.31

USD

Value of electricity produced per day

27,252.10

USD

Project IRR
Project NPV

Capital costs
Complete biodigester, installed incl contingency

35,000,000

USD

Total amount of fertiliser produced

Power generation equipment

20,000,000

USD

Number of 50 kg sacks

Fertiliser process equipment

10,000,000

USD

Total land area required

Balance of system equipment

5,000,000

USD

70,000,000

USD

Total

Total CO2 emissions if dung is dumped


Total CO2 emissions if dung is digested and
combusted
3

m CH4 equivalent of electrical output


Total CO2 emissions savings

70%

26.4%
171,681,362

USD

525,600

MT/annum

10,512,000
20

per annum
Ha

Master Financial Outputs

Carbon Credit Summary


Percentage of decomposition for dumped dung

m3

Rs

US$

Net annual income from electrical

690,126,505

11,697,059

1,156,746

MT/annum

Net annual income from fertiliser

122,185,080

2,070,934

295,453

MT/annum

Net annual income from carbon credits

183,745,039

3,114,323

Total net income after tax

996,056,624

16,882,316

176,814
1,038,109

m CH4
MT/annum

65

Master Variables Input

Carbon credits @ USD 5 per ton

Master outputs

Number of Cows

400,000

Average dung quantity per cow per day

18

kg

Sale price of power per kWhr for natural gas

5.03

Rs

Cost of dung per kg

0.15

Sale price of bagged fertiliser per kg

1.5

Electrical conversion efficiency

196,560

m3CH4 per day

6,879,600,000

BTU's per day

Total volume of methane produced


Energy value of methane produced in one day
in megajoules

7,257,978

MJ per day

Maximum electrical output

24

MW peak

Electrical output used in calculations 80% of max

19

MW

Rs/kg
Rs

28%

Exchange rate to US$

59

Rs

Maximum electrical output in MW

564.5

MWhrs/day

Rate of depreciation of power equipment

10

years

Daily electrical production at 80% of max

451.6

MWhrs/day

Tax rate applied to profit

0.0 %

Value of carbon credits per ton

5.00

Value of ex pipeline gas in Rs per MMBTU

240.00

Total digester volume required


USD
$

4.14

480,000

Value of gas produced per day

28,467.31

USD

Value of electricity produced per day

27,252.10

USD

Project IRR
Project NPV

Capital costs
Complete biodigester, installed incl contingency

35,000,000

USD

Total amount of fertiliser produced

Power generation equipment

20,000,000

USD

Number of 50 kg sacks

Fertiliser process equipment

10,000,000

USD

Total land area required

Balance of system equipment

5,000,000

USD

70,000,000

USD

Total

Total CO2 emissions if dung is dumped


Total CO2 emissions if dung is digested and
combusted
3

m CH4 equivalent of electrical output


Total CO2 emissions savings

70%

32.1%
206,311,241

USD

525,600

MT/annum

10,512,000
20

per annum
Ha

Master Financial Outputs

Carbon Credit Summary


Percentage of decomposition for dumped dung

m3

Rs

US$

Net annual income from electrical

690,126,505

11,697,059

1,156,746

MT/annum

Net annual income from fertiliser

122,185,080

2,070,934

295,453

MT/annum

Net annual income from carbon credits

306,241,732

5,190,538

1,118,553,317

18,958,531

176,814
1,038,109

m CH4
MT/annum

Total net income after tax

66

Master Variables Input

Carbon credits @ USD 10 per ton

Master outputs

Number of Cows

400,000

Average dung quantity per cow per day

18

kg

Sale price of power per kWhr for natural gas

5.03

Rs

Cost of dung per kg

0.15

Sale price of bagged fertiliser per kg

1.5

Electrical conversion efficiency

196,560

m3CH4 per day

6,879,600,000

BTU's per day

Total volume of methane produced


Energy value of methane produced in one day
in megajoules

7,257,978

MJ per day

Maximum electrical output

24

MW peak

Electrical output used in calculations 80% of max

19

MW

Rs/kg
Rs

28%

Exchange rate to US$

59

Rs

Maximum electrical output in MW

564.5

MWhrs/day

Rate of depreciation of power equipment

10

years

Daily electrical production at 80% of max

451.6

MWhrs/day

Tax rate applied to profit

0.0 %

Total digester volume required

Value of carbon credits per ton

10.00

USD

Value of ex pipeline gas in Rs per MMBTU

240.00

4.14

480,000

Value of gas produced per day

28,467.31

USD

Value of electricity produced per day

27,252.10

USD

Project IRR
Project NPV

Capital costs
Complete biodigester, installed incl contingency

35,000,000

USD

Total amount of fertiliser produced

Power generation equipment

20,000,000

USD

Number of 50 kg sacks

Fertiliser process equipment

10,000,000

USD

Total land area required

Balance of system equipment

5,000,000

USD

70,000,000

USD

Total

Total CO2 emissions if dung is dumped


Total CO2 emissions if digested and combusted
3

m CH4 equivalent of electrical output


Total CO2 emissions savings

70%

48.2%
292,885,938

USD

525,600

MT/annum

10,512,000
20

per annum
Ha

Master Financial Outputs

Carbon Credit Summary


Percentage of decomposition for dumped dung

m3

Rs

US$

Net annual income from electrical

690,126,505

11,697,059

1,156,746

MT/annum

Net annual income from fertiliser

122,185,080

2,070,934

295,453

MT/annum

Net annual income from carbon credits

612,483,464

10,381,076

1,424,795,049

24,149,069

176,814
1,038,109

m CH4
MT/annum

Total net income after tax

67

10.4

Financial Summary Table

A total investment of US$ 70 million, processing 7,200 tons of dung per day, will produce
approximately 564 megawatt-hours of electrical output per day to be sold directly into the local
network. Approximately 525,000 tons of organic fertiliser will be produced per annum and
bagged into 50 kg sacks, and sold at the factory gate to produce an additional income stream of
approximately US$ 2.1 million before tax.
Carbon credit income has a marked impact on project viability, as depicted below. Using the
base inputs shown in the preceding tables, the FIRR and NPV has been assessed using a discount
rate of 5%. Considering the risk, the project is not regarded as commercially viable if income
from carbon credits is ignored.
Tax Applied at 0.0 %
Carbon credits at US$ 0
Carbon credits at US$ 3
Carbon credits at US$ 5
Carbon credits at US$ 10

FIRR
18%
26%
32%
48%

NPV (US$)
119,000,000
171,000,000
206,000,000
292,000,000

The positive IRRs need to be balanced against the other geo-political risks. The prevailing view
of investors in Pakistan is that for an investment of this scale a very robust IRR is required.

10.5

Estimation of Overall Cost Estimates

The estimation of costs takes into account three basic components.


1. The biodigestion plant
2. The gas process and utilisation plant (scrubbing, power generation, or compression)
3. The fertiliser process and packaging plant.
Each has its own overhead and depreciation schedules. For simplicity it is assumed that one
single large digester will be constructed; however, this may need to be revised if land constraints
make this option unworkable. Estimations of daily gas production are conservative and at the
very bottom end of forecasted gas production; hence, income streams for energy and carbon
credits are likewise conservative.
A total project cost of US$ 70 million dollars is estimated, comprising US$ 35 million for civil
works, including the construction of the complete biodigester complex, US$ 20 million for
power generation and gas processing, US$ 10 million for fertiliser packing and handling, and an
additional US$ 5 million for balance of system costs, including offices, and boundary fencing,
etc. Cost estimates have been obtained from industry sources.
Land is assumed to be provided as a grant from the local government, so land costs are not
included in the above estimations.
Should a purchase price of USD 40,000,000 (US$2 million per Ha) be required for land for the
project, the project financial projects would thus alter to:

68

Tax Applied at 0.0 %


Carbon credits at US$ 0
Carbon credits at US$ 3
Carbon credits at US$ 5
Carbon credits at US$ 10

10.6

FIRR
5.6 %
10.6 %
13.9 %
22.3 %

NPV (US$ million)


55
107
141
228

Project Financial Analyses

Ignoring income from CO2 credits, taking a conservative figure of income from fertiliser sales,
assuming a low energy yield of 24 MW sold at a realistic Rs 5.03 per kWh, and assuming zero
taxable income, the project is not commercially viable when considering project risk.
The analysis is particularly sensitive to factors impacting on the quantity and quality of raw
dung. As described, this analysis has been based on 196,000 m3 CH4 after consultation with
industry professionals from the wastewater field.
A NPV figure of US$ 119,000,000 is calculated, given the conditions described above and
shown on the master financial input and output sheet above.

10.7

Financing Plan

The presence of, and results from the pilot project is expected to raise confidence amongst
investment sources within Pakistan, both public and private. Once the pilot project is operational
and sufficient data have been obtained to verify or amend the assumptions made in this study, a
feasibility study and investment prospectus will need to be produced in order to attract
investment capital. There is likely to be considerable international interest in the feasibility
study and investment prospectus as international investors are looking for opportunities in the
energy sector in Pakistan.

11

Economic Impacts

The economic impact of the project extends to a wider range of social and environmental
impacts than those considered in the financial analysis.
Conditions of poverty are widespread in Landhi. Employment is scarce and new investment in
business to provide income and employment is impeded by the wholly unattractive local
environment. The biogasification project will contribute to reversing these conditions, and thus
the economic ramifications of poor social development indicators linked to employment,
environment and poverty can be expected to improve.
Land use for the project is not expected to negatively impact on local social or commercial uses.
The land most likely to be utilised is presently government-owned, and located on the outer
urban area, is degraded and desertified and not used for any productive purpose.

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The project impacts on water consumption in the area are expected to be very positive.
Individual farms use around 40 m3/day of water per 200 head of cattle. Much of this water is
used to wash raw dung down the open drains and into the ocean. By collecting the dung and
composting it, water use on the farms is expected to reduce significantly, thus reducing pressure
on an already over taxed sweet water delivery pipeline into Landhi, and reducing or reversing the
salination of local groundwater occurring through unsustainable extraction through shallow
wells.
Land, water, and poverty impacts are not assessed as negative in any case. The pilot project
presently underway will be used to provide empirical data on aspects of employment and water
consumption, plus land use and social impacts. Once quantified, an assessment of economic
impacts can be made, comparing results of the project proceeding, with those of the project not
proceeding.

11.1

Statement of Poverty Reduction Impacts

The removal of 7,200 tons of dung per day from the local Landhi city and environs will make a
significant impact on the local investment and habitation climate. Presently, raw dung is
literately heaped around the streets attracting flies and creating dust and odour that renders the
area rather unappealing to inhabitants, let alone commercial investors. It is anticipated that the
improved environment will indirectly result in improved employment additional to that of the
plant and its activities, but this has not been explicitly included in assessments for this project.
The presence of the plant, potentially improved energy supply and security, reduced dust, odour
and flies, will also reduce poverty of spirit in addition to improving the economic situation for
many local inhabitants. Some 400 new jobs are anticipated, primarily due to the largely manual
task of collecting dung and preparing for loading and unloading into transportation to the
digester, preparation and handling of the fertiliser, operation, management and maintenance of
the digester, power generation and fertiliser plant, as well as grounds and vehicles.
Higher than average salaries of Rs 1,205 per person per day are proposed, both to ensure that the
viability of the project is assessed from a conservative perspective, and also to ensure that the
project retains the ability to deliver on tangible poverty reduction impacts.

11.2

Statement of Social, Gender and Environment Impacts

In an area with high unemployment and low levels of commercial investment, any commercial
investment that improves the environment and offers well-paid employment will be a positive
force. Women, in particular, are identified as beneficiaries of the project as the nature of the
employment tasks, particularly in preparing and printing bags for the fertiliser, will allow their
inclusion in segregated work areas.
Existing pollution in Landhiin terms of air, water and soilis extreme. The adjacent Korangi
stream was identified in a 2004 EPA report as the single most polluted waterway in Pakistan. It
is hard to overstate the severity of the impact that years of untreated and uncontrolled industrial,
farming and household waste dumping has had on the local environment. This project will not

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solve the problem of the contamination of Landhis waterwaysas while it will reduce or
largely prevent the issue of farm waste entering the waterways, industrial and household waste
dumping is expected to continue unchecked. Nevertheless it would constitute a very important
first step.
There is much disused and vacant land in and around Landhi. This is not to say that the land is
not valuable, only that it is not used. Most public land that is not actively in use has become
surrogate dung dumping ground. The provision of alternatives for the disposal of waste is likely
to allow these empty plots to gradually recover from the massive over-nutrification and perhaps
allow the planting of parks and public spaces as will be done in the pilot project in 2006.
The project is not expected to result or impact on resettlement or migration patterns. Landhi is
already an endpoint for internal migrant labour, and this is not expected to decrease with the
existence of the plant. Community infrastructure and organisation is likewise not expected to be
impacted. Existing structures are already identified and operational, but lack the resources and
capacity to deal with the issues presented.

12

Stakeholders Comments

Stakeholders have been involved since 1997 in the development of this concept. The ensuing
period has seen considerable institutional change in Pakistan, especially in the movement from
appointed to elected local government structures and consequent changes in local administration.
Letters of support from the then relevant stakeholders over this period are available for review
upon request. The currently relevant stakeholders were consulted on the first pre-feasibility
mission. The EPA has reviewed the IEE for the pilot plant, and issued a No Objection
Certificate. More detailed planning workshops have been held with grass roots and local
government stakeholders in Karachi, and with policy-level stakeholders in Islamabad.
Grass roots stakeholders comments came mainly from the farmer group representatives, who
were anxious to ensure that they were not sidelined in decision-making processes and ownership
of the planned enterprise. They also enunciated that the project should benefit the whole farmer
community in a conscious raising of environmental and living standards.
The discussion centred mainly around how to structure the pilot enterprise, and beyond this the
up-scaled plant to ensure that local interests were protected. It was agreed in principle that the
entity management should comprise a Management Board representing all the equity
stakeholders, SEEICCK by virtue of its ownership of the demonstration plant assets received
under the NZAID grant, the City District Government in recognition of its ownership of the land,
and the farmers groups whose members own the feedstock. In addition, it was suggested that
the CBOs with employment and social development activities in the area elect one community
representative. The demonstration plant will be managed, operated and maintained day-to-day
by SEEICCK.
Policy-level stakeholders discussed the issues raised at the end of the workshop presentation.

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Principal amongst these are:
1. The definition of biogas; agreed that it should be regarded for tariff construction as a
renewable energy source, and not as fossil natural gas. Safety regulations pertaining to
methane should apply.
2. The energy producing assets should be separated as far as practicable from the fertiliser
producing assets in determining the tariff. This electricity from biogas project will
establish a precedent, but generation facilities with two income streams exist in
hydropower plus irrigation schemes. These may be studied to see if similar treatment of
asset and income values is reasonable.
3. Sale of electricity from the demonstration plant as well as the scaled-up project. It was
agreed that electricity from biogas should receive the same treatment as wind power
under recent regulation; that is, that the utilities be obliged to purchase even quite small
quantities. This removes the difficulties encountered in attempting second tier supply
from small generation facilities. It is not yet clear whether KESC will accept this
opinion.
4. Taxation should be little or nothing, as is the case for large projects that come under the
purview of the PPIB. This matter is being taken up by the AEDB.
5. Policy and practical support should be given to the establishment of a commercial
organic fertiliser market.
6. A Project Design Document (PDD) to apply for carbon credits arising from the project
should be prepared promptly. This was completed and submitted in 2005.

13

Key factors Impacting Project & Baseline Emissions

The most critical factor impacting on project baseline and predicted emissions is the quantity and
composition of the raw dung. This has the most impact on the volume of gas, the percentage of
methane, and the value and quantity of organic fertiliser produced.
To mitigate this factor, a program of testing and analysis is underway, starting with dung and
water sampling from local farms and waterways.
Design variables, such as the hydraulic retention time (HRT), influence how long the slurry
remains in the digester. The longer it resides in the digester, the more complete the recovery of
methane will be. The downside is the impact on the size of the digester. As the retention time
grows, the size of the digester also grows by 11,000 m3 for each extra day. This is not
insignificant, but this risk will be clarified through experimentation with the pilot plant. The
HRT can be optimised for power production, or for environmental impact. A short HRT may
take advantage of the rapid methane production early in the decomposition process, but then
release a slurry at the end of the process that is not completely composted, thus permitting
methane release outside the digester and reducing carbon credit income. The advantage would
be reduced investment in the digester construction, at a cost in revenue and environmental
impact.

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Some risks are present in biological impacts on the feedstock, such as the possibility that disease
will reduce or eliminate entire cattle herds, or that regional political friction may alter the
investment climate. These risks are external to the control of this project and have not been
considered in the assessment undertaken. Nevertheless, a potential investor will require a wider
view of the investment landscape than what Landhi and its environs specifically can offer.

13.1

Project Uncertainties

Securing an investor to underwrite the construction cost is the prime uncertainty in the project at
present. As described, technical assumptions have been made in the formulation of this study
that significantly impact on the assessment of project viability. However, these can be identified
and studied, and then avoided or mitigated. Project investment is not so clear-cut and requires
the assessment of risks less easy to quantify in a spreadsheet, including the political and
biological factors discussed briefly above. Thus, the securing of a firm investor to move the
project forward is the main element of uncertainty as at the time of writing this study report.
There is a small risk about continuity of fuel supply, of which a 30-year guarantee is normally
required for power projects. This might be affected if the colony were evicted from its present
location. Land in the cattle colony area belongs to the City District Government, and is under 30year lease to the farmers. In practice, it would be very difficult for the authorities to resume such
land, but by the same token, it would be impossible for the farmers to sell it. As the city spreads,
the value of this land has increased significantly. At some time in the future, it will become too
valuable to use for industrial purposes, and the colony may move further out into the
countryside. City District officials do not foresee relocation of the colony. This should be
confirmed, or options should be explored before the location of the scaled-up plant is taken for
granted.
Because the Landhi project will produce less than 50 MW, it will be subject to provincial or
AEDB rather than PPIB fast-track provisos. In theory the same conditions are available, but the
potential for delays is higher as these provincial institutions are relatively inexperienced in IPP
implementation.
Governance and regulatory issues are always present in projects such as this; clear understanding
needs to be established about procedures and the lengths of time involved. If the energy is
utilised for electricity, the tariff, applicable taxes and duties, FDI and repatriation of funds,
conditions governing sale or transfer of assets, etc., should be determined in advance.
The region is currently somewhat unstable as a whole, although Pakistan has so far managed to
walk the regional political tightrope with some skill, which gives modest confidence for the
medium to long term in the countrys political and economic stability. There is also some
concern amongst the international community with respect to the democratic evolution of
Pakistan, specifically regarding the dual-role of the President as head of the military
establishment.

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14

Conclusions and Recommendations

The pilot project funding is committed and, notwithstanding unforeseen events, the plant should
be commissioned in late 2006. While it is recommended that 12 months data be gathered prior
to the design of the larger plant being confirmed, preliminary assessments of data related to key
project variables (such as gas production characteristics and mechanisms of dung collection and
fertiliser marketing) will become available within a few months of commissioning.
Therefore it is recommended that:
Close contact be maintained with pilot project proponents in order to reassess the data used
in the formulation of this study during 2006.
Given the viable financial review of the project as contained in this study, preliminary and
non-committal steps can be taken to entering discussions with possible interested investment
partners with a view to better understanding the processes. The investment is significant and
depending on the partner, may take several years to complete.
Following the successful completion of the pilot stage, a full feasibility stage be
commissioned in preparation for a full-scale project.
Risks should be reviewed and mitigation measure pursued before investment or construction
commences.
The social and environmental drivers behind the project are significant and, when added to the
financial viability of the project, make a compelling argument to see this project proceed. In the
present situation, to dump massive amounts of energy-laden fertiliser into the coastal waters of
an energy-short and desertified country is simply not sensible.

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References
ADB, 1997, Economic Analysis for Projects, Asian Development Bank, Manila, the Philippines.
ADB, 2002, Guidelines for the Financial Governance and Management of Investment Projects
Financed by the Asian Development Bank, January, Manila, the Philippines.
PPIB, Policy for Power Generation Projects 2002, Private Power and Infrastructure Board,
Islamabad.
Hydrocarbon Development Institute of Pakistan, 2005, Pakistan Energy Yearbook 2004, HDIP,
Islamabad.
National Electric Power Regulatory Authority (NEPRA), Islamabad:
Application Modification Procedure Regulation, 1999
Regulatory Authority Licensing (Distribution) Rules, 1999
Licensing (Generation) Rules, 2000
Fees and Fines Rules, 2002
Performance Standards (Distribution) Rules, 2005
Nisar, A and A Hamid, eds. (2000), Proceedings of the Symposium on Integrated Plant
Management, National Fertilizer Development Board, Islamabad
PPIB, (n.d.) PPIB Profile, Private Power and Infrastructure Board, Islamabad.