Central Government Opens Window for Ethanol Production Boost

LegalitySimplified

The Central Government has now specified that applicants under Ethanol Blended with Petrol (EBP) Program who have obtained in-principle approval of Department of Food and Public Distribution (DFPD) must secure loan disbursal from eligible financial institutions. This notification was issued on December 28, 2023.

The Central Government had introduced a six-month window starting from April 22, 2022 under the EBP Program. This initiative comes as part of the modified scheme dated January 14, 2021, with a focus on applications from project proponents who have acquired land for ethanol projects and obtained Environmental Clearance (EC).

The purpose of introducing this window was to escalate ethanol production and augment its supply under the EBP Program. Under the scheme, project proponents are encouraged to enhance their existing ethanol distillation capacity or establish new distilleries to produce 1st Generation (1G) ethanol. Feedstocks eligible for the program include cereals such as rice, wheat, barley, corn, and sorghum, as well as sugarcane-related products like sugar, sugar syrup, sugarcane juice, B-heavy molasses, and C-heavy molasses.

Now, the Central Government has specified that applicants must secure loan disbursal from eligible financial institutions, including banks, the National Cooperative Development Corporation (NCDC), Indian Renewable Energy Development Agency (IREDA), Non-Banking Financial Companies (NBFCs), or any other financial institutions eligible for re-finance from the National Bank for Agriculture and Rural Development (NABARD).

Furthermore, the modification stipulates that applicants must secure loan disbursement within one year or by June 30, 2024, whichever is later, from the date of in-principle approval by the DFPD. Failure to adhere to this timeline will result in the cancellation of the in-principle approval for the project. Additionally, the project must be completed within two years from the date of the disbursement of the first installment of the loan.

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