Finance to Bio fuel projects - Business
Finance to Bio fuel projects
Purpose
- To part-finance setting up of Bio-fuels extraction plant (including Biomass suppliers / aggregators), including their storage and distribution infrastructure
Features
- Exclusions / Not eligible:
- Ethanol Projects of Sugar Mills / Molasses based / Grain based / Dual feed-based distilleries having Tripartite Agreement between OMC, Bank & Ethanol Producer under EBP programme where the margin is only 5% of Project cost are not eligible for financing under the Product
- Nature of Facility:
- Term Loan, Working Capital, LC & BG
- Quantum of loan:
- Need based
- Debt : Equity
- Min. 70 : 30
- Loan to Value (LTV) :
- 70
- Margin:
- Term Loan: Min. 30% of Project Cost.
- Project cost shall include all components including margin money for Working Capital as per Bank guidelines on financing Term Loan / Project loans.
- Working Capital: Min. 25%
- Pricing:
25 bps concession over and above the card rates.
- Primary Security:
- Term Loan:
- Exclusive charge on assets created by Bank’s finance including immovable assets, movable assets, cash flow, Commercial Agreement and escrow accounts, DSRA/ISRA (wherever applicable).
- An Escrow account shall be maintained by the Biofuel Plant owner in which all sales proceeds will be received from the OMCs / Private companies from sale of Biofuels and its’ by-products.
- Working Capital:
- Hypothecation of Stocks & Receivables
- Collateral Security:
As per Bank’s extant guidelines for manufacturing units.
Collateral may be relaxed by the Sanctioning Authority, on a case-to-case basis, based on the following:
- Loans upto Rs.2 Crores:
- To be covered under CGTMSE. Annual Guarantee fees to be borne by the borrower.
- Loans above Rs.2 Crores:
- In case of listed Companies, pledge of 51% of shares of the borrower to be explored.
- The borrower has firm Contract / Purchase agreement / Supply agreement with reputed clients like Reliance Industries Ltd., NTPC, Oil Marketing Companies, etc.
- Escrow a/c is maintained for capturing entire cash flows of the unit.
- Personal / Corporate Guarantee:
- Personal Guarantee of all the Promoters
- Corporate Guarantee of the Parent Company in case of SPV / Joint Ventures.
- Repayment Period:
- The overall door-to-door tenor (construction, moratorium + repayment tenor) not to exceed 15 years.
- Moratorium:
- Moratorium after COD: 6 months (maximum)
- Interest to be serviced during moratorium.
Target Group & Eligibility
- Units setting up new / expansion of Bio-fuels extraction plants (including Biomass suppliers / aggregators) for sale to OMCs / Govt. Organisations / Private Companies for usage in transportation, power, heating and other industrial applications.
- [Biofuels would include all types of biofuels including CBG (Non-SATAT) as mentioned in the ‘National Policy of Biofuels 2018’ issued by Ministry of Petroleum & Natural Gas (MoPNG) vide Gazette Notification dated June 8, 2018]
Last Updated On : Tuesday, 19-07-2022

Interest Rates
2.70% p.a.
less than Rs.10 Cr. w.e.f 15.10.22
3.00% p.a.
Rs.10 Cr. and above w.e.f 15.10.22
2.70% p.a.
Balance below Rs. 10 crs
3.00% p.a.
Balance Rs. 10 crores and above
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Criteria
- Features
- Eligibility
- Terms and Conditions

Interest Rates
2.70% p.a.
less than Rs.10 Cr. w.e.f 15.10.22
3.00% p.a.
Rs.10 Cr. and above w.e.f 15.10.22
2.70% p.a.
Balance below Rs. 10 crs
3.00% p.a.
Balance Rs. 10 crores and above