Center extends loan disbursement schedule and completion of ethanol projects


The central government on Tuesday extended the schedule for loan disbursement and completion of ethanol-related projects.

According to the official statement, in order to help project holders to carry out their projects and benefit from the advantages of the interest subsidy, the central government has therefore decided to extend the loan disbursement period until September 30, 2022, for all projects. notified during the period 2018-2021.

Central Government to increase ethanol production and supply under the Ethanol Blended with Petrol (EBP) program, particularly during the surplus season, and thereby improve the liquidity position of sugar mills enabling them to clear farmers’ cane price arrears, notified different interest subsidy schemes for sugar mills and distilleries during the period 2018-2021.

He also read that the government provides financial assistance in the form of an interest subsidy @ 6% per annum or 50% of the interest rate charged by banks, whichever is lower, on loans to be made by banks for five years, including a one-year moratorium.

Under these schemes, the loan disbursement deadline for ethanol projects is until March/April 2022. However, due to the unavoidable and unfortunate situations caused by COVID-19, project developers do not were unable to meet the loan disbursement deadline. banks/financial institutions and unable to complete their projects within a given time frame. Therefore, it is necessary to extend the loan disbursement period under the interest subsidy programs announced earlier in the period 2018-2021.

Based on official information, the ethanol distillation capacity of molasses distilleries was only 215 cr liters before 2014. However, in the past 7 years, due to policy changes made by the government , the capacity of molasses distilleries has increased by one and a half times and is currently at 555 cr liters. The capacity of grain-based distilleries, which was 206 cr liters in 2013, has increased to 280 cr liters.

Thus, the total ethanol production capacity in the country reached 835 crore liters. However, ethanol production capacities need to be increased to around 1700 cr liters to reach 20% blend by 2025. The decision to extend the timeline for ethanol projects would help to further strengthen ethanol production capacities .

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