Scheme for Financing Compressed Biogas (CBG)

Purpose

A financing scheme to set up a Compressed Biogas Plant.

Eligible Projects

Compressed Bio Gas plants across India with a minimum design capacity of CBG plant i.e., 2 tons per day.

Eligible beneficiaries

Entrepreneurs viz., sole proprietorship, partnerships, limited liability partnership, companies and cooperative societies and other constitution of borrowers permissible by Ministry of Petroleum and Natural Gas who have been awarded Letter on Intents (LOI) by Oil Marketing Companies (OMC) for production and supply of Compressed Bio Gas (CBG).

Nature of facility

Working Capital/Term Loan/Bank Guarantee/LC.

Credit Rating

Minimum internal rating should be BOB 6/MSMEBOB 6.

Margin

Working Capital: 25%
• Term Loan: 30%

Interest Rates & Charges

• Applicable rate of interest for accounts having aggregate limit up to Rs. 50 crores.

Rate of interest ranging from BRLLR+SP+0.50% to BRLLR+SP+5.40% based on internal credit rating and immovable property security coverage (including both primary and collateral immovable properties). (Present BRLLR: 6.85%).

• Applicable rate of interest for accounts having an aggregate limit above Rs. 50 crores and up to Rs. 100 crores.

The rate of interest shall be charged @1% over and above the rate of interest applicable to accounts having an aggregate limit up to Rs. 50 crores.

• Applicable rate of interest for accounts having an aggregate limit above Rs. 100 crores and up to Rs. 100 crores.

As per the classification of account vis. MSME/corporate advances.

Loan Tenure & Repayment

The term loan to be repayable in 10-15 years (including moratorium of a minimum of 6 months and maximum of 2 years period).

Repayment: Monthly/quarterly based on cash flow of the project.

Security

• Exclusive charge over entire project assets including immovable assets and movable assets.
• Hypothecation of stock and book debts.
• Personal/Corporate Guarantee Proprietors/Partners/Promoters/Directors/Parent Company, etc.
• Charge over the Escrow account in favour of the lenders.
• Assignment or creation of charge on commercial agreement.
• Any other security acceptable top bank.

Subsidy

As per the notification of the Ministry of New and Renewable Energy, Central Finance Assistance (CFA) of Rs. 4 crores per 4,800 Kg of CBG per day generated from 12,000 cubic meters of Biogas per day with a maximum of Rs. 10 crore per project.

For loans with aggregate limit upto Rs 50.00 Crore

For loans with aggregate limit Above Rs 50.00 Cr and upto Rs 100Cr: Rate of Interest shall be charged @1% over and above the rate of interest applicable to accounts having aggregate limit of Rs 50 Cr

• Exclusive charge over entire project assets including immovable assets and movable assets
• Hypothecation of stocks and book debts
• Personal/corporate Guarantee of Proprietors/Partners/Promoters/Directors/ Parent Company
• Charge over the Escrow Account in favor of the Lenders.

CBG Plant owner will maintain an ESCROW account. Payment received from the sale of CBG and Bio Manure will be received in this ESCROW account

Escrow Account Charges to be recovered on annual basis