The move will facilitate project proponents to complete the projects and to avail of the benefits of interest subvention
The Central Government has decided to extend the timeline for disbursement of loans up to September 30, 2022, in respect of all the schemes notified during 2018-2021. The move will facilitate project proponents to complete the projects and to avail of the benefits of interest subvention.
The government to increase the production of ethanol and its supply under the Ethanol Blended with Petrol (EBP) Programme, especially in the surplus season and thereby improve the liquidity position of the sugar mills enabling them to clear cane price arrears of the farmers, notified different interest subvention schemes for sugar mills and distilleries during 2018-2021. The government is extending financial assistance in the form of interest subvention @ 6 per cent per annum or 50 per cent of the rate of interest charged by banks, whichever is lower, on the loans to be extended by banks for five years including a one-year moratorium.
Under the schemes, the timeline for disbursement of loans for ethanol projects is up to March/April 2022. However, due to the unavoidable and unfortunate situation caused by COVID-19, project proponents were unable to adhere to the time limit for disbursement of loans from Banks/ Financial institutions and unable to complete their projects in a given time frame. Therefore, there is a need to extend the timeline for disbursement of loans under interest subvention schemes announced earlier during 2018-2021.
The ethanol distillation capacity of molasses-based distilleries was only 215 crore litres before 2014. However, in past seven years due to the policy changes made by the government, the capacity of molasses-based distilleries has increased by one and a half times and is currently at 555 crore litres. The capacity of grain-based distilleries which was 206 crore litres in 2013 increased to 280 crore litres. Thus, the total ethanol production capacity in the country has reached 835 crore litres. However, ethanol production capacities are required to be enhanced to about 1700 cr litres to achieve 20 per cent blending by 2025. The decision to extend of timeline for ethanol projects would help in enhancing ethanol production capacities further.
