The total cost of the project had been estimated at US$135 million, Dawn news reported.
The plant will be using bagasse as primary alternative fuel and imported coal as secondary fuel and it will be installed close to a sugar mills in Qasba Shirin near Jamaldin Wali.
The plant is considered to be not only economically supportive but also environment friendly.
According to estimates, Pakistan has a potential of generating more than 3,000MW of electricity from its sugarcane by-product through co-generation.
The government has recognised that bagasse-based co-generation power plants can play a significant role in improving the country’s power generation capacity.
In addition to supplying power and steam to the sugar mills, the plant will generate around 51.8MW of electricity which will be provided to the national grid.