To meet India＇s projected power demand over the next 25 years, over 300,000 MVe of new generating capacity will need to be installed. Cogeneration, the combined generation of steam and electricity, is an efficient and cost-effective means to save energy and reduce pollution. Many studies around the world have identified sugar mill cogeneration as an attractive low-cost power option. Most studies estimate the cogeneration potential of India＇s sugar mills at around 3500 MWe. The United States Agency for International Development (USAID) has implemented a Greenhouse Gas Pollution Prevention (GEP) Project to assist in the direction and pace of India＇s power sector development. This seven-year, US$19 million effort is funded through the United States＇ contribution to the pilot phase of the Global Environmental Facility (GEF). The GEF＇s mission is to assist developing countries in investing in environmental protection initiatives that yield global benefits in terms of reduced or avoided greenhouse gas emissions. Technical aspects of the GEP Project are being managed by the United States Department of Energy＇s Pittsburgh Energy Technology Center. The objective of the Advanced Bagasse Cogeneration (ABC) Component of the GEP Project is to promote year-round cogeneration in Indian sugar mills with power export using only biomass as a fuel. The structure of the ABC Component, which is implemented through technical assistance and investment subcomponents, and the status of various activities are reviewed. Also, sugar production and economics are reviewed from both a global and local perspective to reveal how they impact the potential for cogeneration projects in Indian sugar mills. Progress in the Indian sugar industry should pave the way for cogeneration projects in other industrial sectors, such as paper, chemicals, and textiles. Contributions from these sectors are important if India is to meet its huge power generation needs.