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CCEA approves Rs 2,790 cr corpus for sugar mill loan interest subvention
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Saturday, 09 March, 2019, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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Aiming at improving liquidity of sugar mills by way of value addition to their revenues from supply of ethanol under the Ethanol Blended Petrol Programme (EBP), the Cabinet Committee on Economic Affairs (CCEA) has given its approval for a Rs 2,790 crore corpus fund towards interest subvention for extending the indicative loan amount of Rs 12,900 crore by banks to the sugar mills under the scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity.
Chaired by Prime Minister Narendra Modi, CCEA has also approved Rs 565 crore towards interest subvention for extending an indicative loan amount of Rs 2,600 crore by banks to the molasses-based standalone distilleries to augment capacity through installation of incineration boilers and other methods in the existing distilleries for achieving zero liquid discharge (ZLD) and additional equipment for ethanol production.
Further, the fund can be used for the setting up of new standalone distilleries for ethanol production.
A separate scheme for the molasses-based standalone distilleries would be formulated accordingly by the Department of Food and Public Distribution, the government informed in a statement here.
The government has notified the National Policy on Bio-fuels in year 2018, under which diversion of B-heavy molasses and sugarcane juice to produce ethanol has been allowed in surplus seasons.
In order to augment the ethanol production capacity, and thereby also allow the diversion of sugar for the production of ethanol, in the earlier-approved scheme, soft loans are being extended through banks to the sugar mills for setting up new distilleries/expansion of existing distilleries and installation of incineration boilers or installation of any method as approved by the Central Pollution Control Board for ZLD, for which the Government had approved interest subvention of Rs 1,332 crore.
In-principle approval was accorded by the Government for extending soft loans of about Rs 6,139 crore to 114 sugar mills under that scheme.
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