New Delhi: The Centre has notified the scheme for increasing the financial viability of cooperative sugar mills through interest subvention on bank loans for converting their existing sugarcane-based ethanol plants to multi-feedstock units, according to an official statement issued on Friday.
This conversion allows the sugar mills to use maize and damaged food grains, ensuring year-round ethanol production and improved efficiency. The initiative aligns with the Ethanol Blended Petrol (EBP) Programme, targeting 20 per cent ethanol blending with petrol by 2025.
Under this modified Ethanol Interest Subvention Scheme, the government is facilitating entrepreneurs with interest subvention at the rate of 6 per cent per annum or 50 per cent of the rate of interest charged on loans given to them by banks and financial institutions, whichever is lower. The cost of the interest waiver is being borne by the Central government for five years including a one-year moratorium, the statement said.
The sugarcane crushing period is limited to 4-5 months only in a year due to which sugar mills can operate for a limited period of time. This further leads to a reduction in their overall operational efficiency and productivity. To ensure the functioning of cooperative sugar mills throughout the year, their existing ethanol plants can be converted into multi-feedstock-based plants to use grains like maize and damaged foodgrains under the new modified scheme.
The conversion to multi-feedstock based plants would not only make the existing ethanol plants of cooperative sugar mills capable of operating when sugar-based feedstocks are not available for ethanol production but will also improve efficiency and productivity of these plants. As a result, these cooperative ethanol plants will have increased financial viability, according to the official statement.
The Centre has been implementing the Ethanol Blended with Petrol (EBP) Programme throughout the country. Under the EBP Programme, the government has fixed the target of 20 per cent blending of ethanol with petrol by 2025. The Government has notified various ethanol interest subvention schemes from July 2018 to April 2022.
(IANS)
