The government has extended the timeline for disbursement of loan for ethanol projects under different schemes till September 30, 2022, as part of its efforts to boost domestic production and achieve ethanol blending of 20 per cent by 2025. It has decided to extend the timeline for disbursement of loans till September 30, 2022 in respect of all the schemes notified during 2018-2021. The move is aimed at facilitating entities to complete their projects and avail benefits of interest subvention.
The Centre has notified different interest subvention schemes for sugar mills and distilleries during 2018-2021, with a view to increasing production of ethanol and its supply under Ethanol Blended with Petrol (EBP) Programme, especially in the surplus season. This will also improve the liquidity position of the sugar mills enabling them to clear cane price arrears of farmers. The government is extending financial assistance in the form of interest subvention at 6 per cent per annum or 50 per cent of rate of interest charged by banks, whichever is lower, on the loans to be extended by banks for five years, including one-year moratorium.
Under the schemes, the timeline for disbursement of loan for ethanol projects is up to March/April, 2022. However, due to unavoidable and unfortunate situation caused by COVID-19, project proponents were unable to adhere to the time limit for disbursement of loan from banks/financial institutions and unable to complete their projects in a given time frame. Therefore, there is a need to extend the time line for disbursement of loans under interest subvention schemes announced earlier during 2018-2021.
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