Synopsis
On March 7, the Central Government announced a new scheme to enhance the financial viability of cooperative sugar mills through interest subvention on loans, enabling the conversion of sugarcane-based ethanol plants to multi-feedstock units, thereby promoting year-round ethanol production and aligning with the EBP Programme's goals.Key Takeaways
- Interest subvention introduced for sugar mills.
- Conversion to multi-feedstock units will enhance production.
- Scheme aligns with EBP Programme for 2025 goals.
- Government covers interest waiver for five years.
- Improved operational efficiency for cooperative mills.
New Delhi, March 7 (NationPress) The Central Government has introduced a scheme aimed at enhancing the financial sustainability of cooperative sugar mills through interest subvention on bank loans. This initiative will facilitate the conversion of existing sugarcane-based ethanol plants into multi-feedstock facilities, as per an official announcement made on Friday.
This conversion will enable sugar mills to utilize maize and damaged food grains, leading to continuous ethanol production and better operational efficiency. This effort is in line with the Ethanol Blended Petrol (EBP) Programme, which aims for a 20 percent ethanol blending with petrol by 2025.
Under the revised Ethanol Interest Subvention Scheme, entrepreneurs will benefit from an interest subvention of 6 percent per annum or 50 percent of the interest charged on loans from banks and financial institutions, depending on which is lower. The Central Government will cover the cost of this interest waiver for five years, inclusive of a one-year moratorium, the statement noted.
The sugarcane crushing season lasts only 4-5 months annually, which restricts the operational time of sugar mills and results in decreased efficiency and productivity. To maintain the year-round operation of cooperative sugar mills, the existing ethanol plants can be transformed into multi-feedstock plants that can utilize grains like maize and damaged food grains under the new modified scheme.
This transition to multi-feedstock plants will not only enable cooperative sugar mills to operate when sugar-based feedstocks are unavailable but will also enhance the efficiency and productivity of these facilities. Consequently, these cooperative ethanol plants will achieve greater financial viability, according to the official statement.
The Central Government has been executing the Ethanol Blended with Petrol (EBP) Programme nationwide. Through the EBP Programme, the government has set a target of 20 percent ethanol blending with petrol by 2025. Various ethanol interest subvention schemes have been announced from July 2018 to April 2022.
