The MNRE and CPCB offer substantial financial assistance for biomass briquette/pellet manufacturing and cogeneration projects. The IREDA scheme also supports the establishment of biomass production facilities. Applications should be submitted through the BioURJA Portal.


MNRE Biomass Programme:

Objective: To support the establishment of Biomass Briquette/Pellet manufacturing plants and Biomass (non-bagasse) based cogeneration projects in industries.

Financial Assistance:

  1. Briquette/Pellet Manufacturing Plants: ₹9 Lakh per metric ton/hour (MTPH) manufacturing capacity, with a maximum Central Financial Assistance (CFA) of ₹45 Lakhs per plant.
  2. Biomass (Non-bagasse) Cogeneration Projects: ₹40 Lakhs/MW based on installed capacity, with a maximum CFA of ₹5 Crores per project.

Application Process:

  1. Apply through the BioURJA Portal before commissioning the Biomass plant.

Inspection Agencies:

  1. For Briquette/Pellet Manufacturing Plants: Concerned State Nodal Agencies for Renewable Energy (SNAs) or Sardar Swaran Singh National Institute of Bio-Energy (SSS-NIBE).
  2. For Biomass (non-bagasse) Cogeneration Projects: Concerned State Nodal Agency (SNA) and Sardar Swaran Singh National Institute of Bio-Energy (SSS-NIBE).

Note: Self-funded projects are also eligible for Central Financial Assistance.

CPCB Financial Support:

Environment Protection Charge (EPC) Funds:

  1. Non-torrefied Plant Setup: One-time support of ₹14 Lakh per ton of production capacity per hour, with a ceiling of ₹70 Lakhs.
  2. Torrefied Plant Setup: One-time capital support of ₹28 Lakh per ton of production capacity per hour, with a ceiling of ₹1.40 Crores.

CPCB Subsidy Proposal: The Central Pollution Control Board (CPCB) plans to provide subsidies to biomass pellet manufacturers in Punjab, Haryana, Rajasthan, Uttar Pradesh, and Delhi. A fund of ₹50 Crores has been allocated for this purpose.

Application Steps:

  1. Submit your proposal for “In-Principle” approval of Central Financial Assistance (CFA) through the BioURJA Portal before commissioning the Biomass plant.
  2. For Projects with Debt/Loans: The Ministry will issue an “In-Principle” approval with concurrence from the Internal Finance Division (IFD) and approval of the Secretary, MNRE.
  3. For Projects without Debt/Loan: The Implementation Agency will examine and submit applications to the Project Appraisal Committee (PAC). The Ministry will then issue an “In-Principle” approval.

Commissioning Time Frame:

  1. Briquette/Pellet Manufacturing Plants: 12 months from the date of “In-Principle” approval.
  2. Biomass (Non-bagasse) Cogeneration Plants: 24 months from the date of “In-Principle” approval.

IREDA Financing Scheme - “Manufacturing of Biomass Pellets/Briquettes/Torrefied Pellets/Refuse Derived Fuels (RDF)”

Objective: To provide financial assistance for setting up facilities for the manufacture of Biomass Pellets/Briquette/RDF, promoting the processing of agricultural crop residues/MSW economically and supporting a sustainable environment.

Eligible Entities: As per the Financing Norms of IREDA.

Projects Eligible for Assistance: All commercially viable Biomass pellets/Torrefied Pellets/Briquette/RDF manufacturing plants.

Minimum Loan: The minimum loan eligibility from IREDA will be ₹50 Lakh.

Promoter Contribution and Quantum of Loan:

  1. Project Cost up to ₹5 Cr: Loan Amount up to 70% of the project cost.
  2. Project Cost more than ₹5 Cr & up to ₹10 Cr: Loan Amount up to 60% of the project cost.
  3. Project Cost more than ₹10 Cr: Loan Amount up to 50% of the project cost.
  4. The minimum promoter contribution shall be 30% of the project cost.

Interest Rate: The applicable interest rate varies and depends on the grade of the project, as per the IREDA Credit Risk Rating system (CRRS):

  1. Grade I: 10.25%
  2. Grade II: 10.75%
  3. Grade III: 11.15%
  4. Grade IV: 11.45%

Repayment Period & Moratorium: The repayment period shall be a maximum of 6 years, depending on project cash flows and DSCR of the project, with a moratorium period of up to 12 months from the COD of the project.

Securities:

  1. Exclusive or pari passu charge on plant and machinery by way of hypothecation of movable assets.
  2. Pledge of a minimum 51% shares of the applicant company.
  3. Additional securities such as mortgage of collateral security, corporate/personal guarantees, third-party guarantee, deposit of PDCs, demand promissory note, BG/FDR for not less than 10% of the loan, etc.
  4. Revenue from the sale of pellets/briquettes/RDF to be routed through TRA, providing an exclusive charge on the Trust & Retention account (TRA).

Fees and Charges: As per the Financing guidelines of IREDA.

General Conditions:

  1. All commercially viable Biomass pellets/Torrefied Pellets/Briquette/RDF manufacturing plants are eligible.
  2. Site-specific biomass resource availability/survey reports must be provided.
  3. Market survey reports indicating potential buyers of pellets/briquettes around the site.
  4. The borrower must provide all necessary information and documents for the procurement of goods, services, and works financed by IREDA.
  5. Any subsidy/grant from the Central/State Governments shall be adjusted against the loan sanctioned by IREDA.
  6. Any interest subvention/interest subsidy given by the State/Central Government will be passed on to the project.
  7. Other terms and conditions shall be as per the prevailing Financing Norms/Guidelines of IREDA.

For more details, policies, and notices, please download the documents below.