For generation of cheaper electricity through renewable resources, the government plans to use bagasse, the waste material of sugarcane that sugar industry produces by the truckloads. Announcing tariff determination for the first sugar mill that has proposed to generate 80MW through use of bagasse and coal, the regulatory authority has decided that an IRR of 18 percent on bagasse would be offered as an incentive. The IRR or the Internal Rate of Return is an indicator of the value of an investment. If it is greater than the established minimum rate of return or cost of capital and deemed added value for the company (i.e., it is profitable). The government thinks that by offering the incentive of an IRR of above 18 % to sugar mills who achieve commercial operation, it can make the sugar industry contribute some 3000 MW to power generation. The 18 % IRR being offered on bagasse is 3% higher than the IRR allowed to thermal projects on residual fuel. So this is a very lucrative offer for the 77 sugar mills owned by elite of the country. But in order to be really effective, this policy needs to be made a little more open-ended for various other categories of Pakistani enterprises who have the capacity to set up power plants of five or ten megawatts each that are powered by coal, wind or solar energy both for their own use as an industry or as a co-generating ally of the state power utility to supplement the national grid. They include large and medium size business units like the textile mills, approved housing societies with minimum of 500x units each and industrial concerns having holdings of Pakistani expatriates. The Government of Pakistan just needs to lay down a very simple procedure of allowing these investments by just ensuring that there is no beauracratic red tape. If something like a 1000 such plants of say average 5 MW capacity each are established, an additional 5000 MW can be generated in very quick time, may be in the next couple of years. In this manner, power generation at micro level would be a privatized affair whereas WAPDA would continue to build and operate power plants of larger capacity. -QAISER ALI RAZA, Rawalpindi, April 29.