Finance to Bio fuel projects - Business

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.