About 90% of the arable land in Mauritius is Under sugar cane, with an annual production of 600,000 tonnes of Sugar. Around 1.8 million tonnes of bagasse Lire available annually, principally for electricity generation in the sugar factories, and lately, for producing power for export to the national grid. Following the enactment of appropriate legislation by Government, and active involvement of the local private entrepreneurs, bagasse-generated electricity exports to the grid have become a major source of revenue. To ensure that all stakeholders in the sugar industry benefit from the sale of electricity to the grid, the Government established the Bagasse Transfer Price Fund and the Sugar Investment Trust, Which ensure that revenue from co-generation is equitably shared by all stakeholders. This paper presents the main features of the revenue-sharing mechanism, Which ensures that substantial benefits flow to all key stakeholders of the sugar economy, including poor smallholder Sugar farmers.