Ispat Energy Ltd, a part of Ispat Industries Ltd, is planning an investment worth Rs 1,000 crore in the current fiscal, for producing bio-CNG from pressmud, a byproduct of sugarcane processing.

The gas produced can be used as a fuel for transportation and industrial applications.

According to the source, the company has showed it’s willing to work with 20 sugar mills in Maharashtra and Uttar Pradesh for producing bio-CNG.

The firm has decided to invest Rs 35 crore in a bio-CNG facility for Warna Sugar Ltd, Maharashtra.

Recently, Ispat Energy has signed a BOOT (build-own-operate-transfer) pact with Warna for setting up the 11,000 cubic metres a day bio-CNG plant.

The plant, which will be operational by October 2009, is expected to utilise 110 tonnes of pressmud and 100 tonnes of wet and dry organic manure a day to produce the gas.