Barwon Water Infrastructure and Technology General Manager Shaun Cumming said the project to upgrade Colac's current facility will begin in the new year.
Mr. Cumming says organic waste produced by the Bulla and the ALC will be transformed into renewable energy .
"We'll leverage our wastewater infrastructure to recycle food processing waste into electricity, hot water and soil conditioner and we'll generate enough electricity to take the Colac wastewater treatment plant off the grid," he said.
"It will also feed electricity into the grid and that's about the equivalent of 1000 houses worth of renewable energy."
"Overall that would reduce the emissions by 6,300 tonnes of carbon dioxide this year which is really significant."
"In addition to the significant environmental benefits as well it will reduce energy and waste costs which will help keep our water bills affordable but also support global manufacturing in Colac."
Mr. Cumming says the first phase of the project will come online in the new year which is when the plant will be off the grid, before the rest of the work will be set to be completed by the end of 2022.
This is when the electricity will start being fed into the grid and hot water will start to be provided to the two industries.