Ministry of New and Renewable Energy Biomass Power Division

SCHEME TO SUPPORT PROMOTION OF BIOMASS BASED

COGENERATION IN SUGAR MILLS AND OTHER INDUSTRIES IN THE

COUNTRY (UP TO MARCH 2020)

 1.OBJECTIVE

The objective of the scheme is to support Biomass based Cogeneration Projects in Sugar mills and Other Industries for power generation in the country.   

2.Biomass Resources Covered under the programme

The programme will provide CFA for projects utilizing biomass like bagasse, agro-based industrial residue, crop residues, wood produced through energy plantations, weeds, wood waste produced in industrial operations, etc. Municipal Solid Waste is not covered under the programme.

3.Eligibility  

Registered Companies, Partnership Firms, Proprietorship Firms, Cooperatives, Public Sector Companies, Government owned Firms are eligible for financial support available under the scheme. To avail financial support the applicant must have availed term loan from any financial institution like Public Sector Banks, NBFC, Private Sector Banks, Central or State Cooperative Banks etc. CFA (Central Financial assistance) will not be provided under the scheme to the firms which have not availed term loan.

4.Central Financial assistance(CFA)

Central Financial Assistance (CFA) will be provided at the rate of Rs.25 Lakh/MW (for bagasse cogeneration projects) and Rs.50 Lakh/MW (Nonbagasse Cogeneration projects) under the scheme. The CFA will be back-ended and will be released in one instalment after successful commissioning and commencement of commercial generation and performance testing of the plant. The CFA will be released to the term loan account to reduce the loan component of the promoter. No advance CFA will be released under the scheme. CFA will be provided only for projects which will be installing new boiler and turbines. CFA will be calculated on surplus exportable power as mentioned in Power Purchase Agreement (PPA) / Appraisal Report in case of bagasse cogeneration projects and on installed capacity in case of non- bagasse Cogeneration Projects.

5.Expansionary Projects:-

Biomass based cogeneration projects which intend to add capacity to the existing plants will also be considered for grant of CFA. CFA for such projects will be considered only for enhanced capacity. Applications already received for expansionary projects will be cleared as per guidelines existing at the time of submission of applications. All proposals will be examined by PAC and the recommended proposals will be considered eligible for grant of CFA.

6.Sanction of proposals

To avail CFA, the developers have to forward a copy of DPR to the Ministry through lead Financial Institution (FI) which is providing loan the project. Applications will be invited every quarter based on availability of funds and will be put up before Project Appraisal Committee (PAC). Further the Financial Institution will give presentation before Project Appraisal Committee (PAC). The sanction letter for grant of CFA will be issued to the promoter with approval of IFD and Secretary. Prior sanction letter from the Ministry is required for availing CFA. Applications received before notification of this scheme will be processed as per the extant guidelines prevailing during the period.

7.Time line for completion of the project

Promoters have to complete the project within twenty four months from the date of sanction. Another six months extension will be considered without penalty at the level of Secretary MNRE in cases where the reasons for delays are not attributable to the developer. In case the project is not completed within the stipulated time period, the sanction order for grant of CFA will stand cancelled.

8.Incentives to state Nodal Agencies

State Nodal Agencies (SNAs) will be provided Rs. 1 Lakh/MW (Maximum Rs.10 Lakh per project) as incentive or service charge towards post installation monitoring of the projects and sending periodic reports to the Ministry.

9.Performance Inspection

On receipt of information about the commissioning of the plant, a letter for performance inspection of the plant will be issued to lead FI. The utility where the project is located will carry out the performance testing. The respective SNA will be a part of the performance testing. Any charges for performance testing will be borne by the developer. Performance testing of the project would inter-alia imply operation of the project for three months including at least 72 hours continuous operation at minimum 80% of rated capacity.

10.Monitoring of the projects 

Periodic monitoring of the projects will be monitoring will be carried out by a team comprising representatives from Utilities, SNAs, experts appointed by MNRE and Ministry officials.

11.Standards

Quality of project and the equipment utilized therein is considered important for reliability and long-term operations. Project developers would be required to follow various national/international standards for equipment utilized in a project. For biomass based cogeneration projects, equipment should confirm to the following standards. The standards will vary from time to time and modified standards will be incorporated in the programme after due diligence with stake holders.

11.Support to promotional activities

Ministry will support the seminar, symposium, workshops, newsletter and other related activities to popularize the programme as per existing norms of I&PA division        

12. Any Other issues  

All the communication will be done through the Lead FI only. In case of any ambiguity for interpretation of guidelines, Ministry’s decision shall be final.

 Annexure I

PROCEDURE FOR AVAILING FINANCIAL ASSISTANCE

The application in the prescribed format given in Proforma BM-1 for CFA shall be forwarded by the Developer through Lead FI immediately after approval of the term loan with copy of their appraisal note for eligible financial assistance. The Lead FI shall certify the information and also verify and authenticate all the documents. The documents required for sanction of the CFA are as follows:-

1. Filled in Proforma BM-1
2. Copy of DPR
3. Copy of Loan Sanction letter (F.I. wise)
4. Latest Photographs of Site
5. Appraisal Note of Lead FI
6. Consent to Establish from State Pollution Control Board mentioning the cogeneration power project.
7. EIA clearance (From MoEF&CC for Projects having installed capacity ≥ 20 MW and from SEIAA for projects having installed capacity greater than 15 MW but less than 20 MW)
8. Copy of PPA (for Bagasse based cogeneration projects)
9. Three separate Duly notarized Undertakings in original for:-

• Keeping the plant operational for a minimum period of 10 years.
• Cogeneration plant will not be utilizing any fossil fuel.
• Promoters have not availed and will not avail subsidy for the cogeneration power plant from other programmes of MNRE or any other Central Government Ministry.

      10. Purchase Orders for Boiler and Turbine (if any)

Annexure II

Documents required for release of CFA

After receiving the performance inspection report of the project from the utility, the Lead FI has to forward the following documents for release of CFA:  

1. CA certificate in original for total cost incurred on the project.
2. Invoices for the purchase of boiler and turbine.
3. Loan Disbursal Certificates (FI-wise)
4. Specification of the plant certified by the performance inspecting utility.
5. Consent to operate from State Pollution Control Board.
6. Set of Photographs of the project.

Lead FIs must also send scanned copies of all the documents required for sanction as well as release of CFA as mentioned in Annexure – I and II.   

PROFORMA BM-1

APPLICATION FORMAT FOR SCHEME TO PROMOTE BIOMASS BASED COGENERATION IN INDUSTRIES AND SUGAR MILLS IN THE COUNTRY UP TO 2020

 [TO BE FILLED IN BY PROMOTER & FORWARDED BY LEAD FI]

1. GENERAL

2. Project Details

• For Bagasse Cogeneration Power Projects:-

• For Non-Bagasse Cogeneration Power Projects:-

3. POWER GENERATION       

4. STATUS OF THE PROJECT

5. AVERAGE COST OF POWER GENERATION (Rs/KwH)–

6. FINANCING

7. TECHNICAL DETAILS

8. BANK DETAILS

I hereby certify that all the information provided above are true and correct.

 (Signature and Stamp of FI)