Government on Tuesday extended the deadline for loan disbursement of ethanol projects till September 30, 2022, a move which will help in boosting production of the renewable fuel, which is made of corn and other plants.
The step, official sources said, will also help in meeting the target of achieving 20 per cent ethanol blending by 2025.
The earlier deadline for loan disbursement was March-April 2022.
Ministry of Consumer Affairs said in a statement that the timeline for disbursement of loans of ethanol projects has been extended till September 30, 2022 in respect of all the schemes notified during 2018-2021.
The move is aimed at facilitating entities to complete their projects and avail benefits of interest subvention.
The Centre has notified different interest subvention schemes for sugar mills and distilleries during 2018-2021, to enhance ethanol production and its supply under Ethanol Blended with Petrol (EBP) Programme, especially in the surplus season. This will also improve the liquidity position of the sugar mills enabling them to clear cane price arrears of farmers.
The government also extends financial assistance in the form of interest subvention at 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.
"However, due to unavoidable and unfortunate situation caused by COVID-19, project proponents were unable to adhere to the time limit for disbursement of loan from banks and unable to complete their projects in a given time frame. Therefore, there is a need to extend the time line for disbursement of loans under interest subvention schemes announced earlier during 2018-2021," the statement said.