Montreal forest products giant Tembec Inc. is launching a $190 million cogeneration project in Témiscamingue in Canada and plans a future boost in capacity.

The cogeneration programme will replace three old boilers with one modern high-pressure unit burning liquors produced in Tembec‘s existing chemicals plants.

The Quebec government is providing a $75 million loan and Tembec will soon begin negotiations for a long-term power purchase agreement with Hydro-Quebec.

CEO James Lopez, who has led a five-year restructuring of Tembec, says the energy investment and capacity boost in the region in northwestern Quebec are key medium-term moves.

‘This is the most exciting investment this company has made in a long time,’ said Lopez. ‘It’s going to be a real game changer investment for the company because of the green energy element that is going to substantially change the cost structure.’

The cogeneration project is related to Témiscamingue’s dissolving pulp, a product in strong export demand for rayon manufacture and other uses, Lopez said. ‘It’s an international growth market and we must compete.’

Tembec’s total captive generating capacity at its facilities in Canada and France now exceeds 150 MW.

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