Construction of the CHP at the 350-staff mill in Ayrshire, Scotland, will replace the existing coal-fired boiler.
The site, which annually produces 280,000 tonnes of coated magazine papers, can then generate all steam requirements and around 55% of electricity supply needs on-site.
Fuel will be 100% biomass and the approved £59m budget has also been given £10m of Regional Selective Assistance from the Scottish Government.
The mill is expected to be in commercial operation on 20 May 2009. However, UPM said demand for biomass has created upward cost pressure, although the company would not comment further on this.
In December 2006, the CHP investment decision was made and demolition work started on 1 June that year.
Construction of UPM's 59m biomass site on schedule
The building of UPM's 59m combined heat and power plant (CHP) at its Caledonian mill is going according to plan, with all project milestones achieved, the company has announced.
