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Govt extends timeline for disbursement of loan & completion of ethanol projects

27 Jun 2023 Evaluate

In an effort towards enhancing ethanol production capacities further with the vision to boost the agricultural economy and to reduce dependence on imported fossil fuel, the central government has extended timeline for disbursement of loan/completion of ethanol projects up to September 30, 2023.

Under the ‘scheme for extending financial assistance to sugar mills for augmentation of ethanol production capacity’, the central government extends soft loan through banks to the mills for setting up new distilleries/ expansion of existing distilleries and installation of incineration boilers or installation of any method as approved by Central Pollution Control Board for Zero Liquid Discharge. The Government bears interest subvention for the loan disbursed. The Central Government has decided to extend the timeline for disbursement of loans up to September 30, 2023 in respect of all the schemes notified during 2018-2021.

The previous timeline for disbursement of loans for the schemes related to ethanol projects was up to March 31, 2023. However, due to multiple challenges in processing loan applications and coordination with multiple agencies, project proponents were unable to adhere to the time limit for the disbursement of loans from Banks/ Financial institutions. They were unable to complete the projects within the given timeline. Therefore, there is a need to extend the timeline for the disbursement of loans under interest subvention schemes announced earlier during 2018-2021.The government is extending financial assistance in the form of interest subvention at 6% per annum or 50% 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.


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