Price of sugar in the world market is very volatile and in most cases is below the cost ofrnproduction. Moreover, sustainability of the sugar industries is becoming even worse withrnincreasing petroleum price which is resulting in high rate of cost of sugar production. This could,rnhowever be reduced, by a number of methods that would increase revenues for non-consumablernproducts derived from cane. Bagasse, which is the fibrous material found after the cane crushingrnprocess is one of the by-products of the cane sugar industry with almost zero fuel cost.rnHistorically, it is used in sugar industries for generating power to fulfill steam and electricityrnrequirement of the mills. Cogeneration is the simultaneous production of electric and thermalrnenergy from a single energy system and source. It is also known as combined heat and powerrn(CHP) technology. Cogeneration can be based on a wide variety of fuels; however, in thernsugarcane growing countries, cogeneration from bagasse is becoming increasingly important.rnIn this study, investigation result of the potential of co-generation process of the Ethiopian sugarrnindustry for power generation is outlined, through analysis of a selected typical sugar millrnFinchaa Sugar Factory (FSF) among the existing three sugar mills in the country and by makingrnreference to different project case studies in different countries where the potential of therncane sugar industry has been given a boost.rnThe data in relation to the cane and bagasse utilization as well as turbine and boiler specificationrnis directly obtained from FSF. The strategy used for the analysis is bagasse drying technique andrnRETScreen software is used for simulation purposes by changing the existing back-pressurernturbine through the high pressure boiler-turbine configuration. The result from the study showsrnthat by reducing the moisture content of bagasse up to 20 %, we are able to generate 6,311.45rnMwh of excess electrical power which could be used to supply the irrigation pump stations of thernfactory, part of the residences of factory and the nearby villages, where currently there is nornsupply of electrical power from the national grid. The cost of energy is also computed and foundrnto be around $0.017/kwh. The simulation result also shows that through changing the existingrnmedium pressure turbine of the factory by the high pressure, we can generate 48,279 mwh ofrnelectrical power which could be exported to the national grid while simultaneously providingrn145,872.8 excess bagasse which could be pelletized and exported to foreign countries where it isrnused as a useful fuel for cooking gazes as well as generating electrical power.rnPolygeneration of Heat, Power and Bio-fuel: A case study at Finchaa Sugar FactoryrnAAU , AAIT , M.Sc. Thesis by Binyam Semret , Advisor :- Dr. Getachew Bekele Page VIIrnKeywords: Bagasse, Boiler, Cane Sugar, Co-generation, Power, Pellet, RETScreen, Turbine