New Delhi: The Centre has decided to extend, up to September 30, the timeline for disbursement of loans to sugar mills in respect of all schemes notified during 2018-2021 to facilitate project proponents to complete their projects & to avail benefits of interest subvention for ethanol production, a statement said on Tuesday.
With a view to increase production of ethanol and its supply under ‘Ethanol Blended with Petrol (EBP)’ programme, especially in the surplus season and thereby to improve the liquidity position of sugar mills enabling them to clear arrears of cane farmers, the Centre notified different interest subvention schemes for sugar mills and distilleries during 2018-2021.
“Government is extending financial assistance in the form of interest subvention @ 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,” a Consumer Affairs, Food and Public Distribution Ministry statement said.
As is known today, with the vision to boost agricultural economy, to reduce dependence on imported fossil fuel, to save foreign exchange on account of crude oil import bill and to reduce the air pollution, the government has fixed a target of 10 per cent blending of fuel grade ethanol with petrol by 2022 and 20 per cent blending by 2025.
“Under the schemes, the timeline for disbursement of loan for ethanol projects is up to March/April, 2022. However, due to unavoidable and unfortunate situations 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 timeline for disbursement of loans under interest subvention schemes announced earlier during 2018-2021,” the statement said.