Scheme to Support Promotion of Biomass-Based Cogeneration
Scheme to Support Promotion of Biomass-Based Cogeneration
The Ministry of New and Renewable Energy (MNRE) has launched the Scheme to Support Promotion of Biomass-Based Cogeneration in Sugar Mills and Other Industries for promoting biomass power and bagasse cogeneration in India. The key objective of the scheme is to utilise the available biomass resources like bagasse, rice husk, straw, cotton stalk and coconut shell for power generation. As part of the scheme, MNRE provides central financial assistance (CFA) for projects utilising biomass. In this article, we will look at the Scheme to Support Promotion of Biomass-Based Cogeneration in Sugar Mills and Other Industries in detail.
The principal objective of the scheme is to support the development of Biomass-Based Cogeneration in sugar mills and other industries for power generation in India.
Biomass Resources Covered under the Scheme
Following Biomass Resources are covered under the Scheme to Support Promotion of Biomass-Based Cogeneration.
- Residues from the Agriculture industry
- Crop residue
- Bagasse (Fibrous residue)
- Wood produced in energy plantation
- Wood waste produced in other industrial operation
Note: Financial assistance will not be provided to the projects utilizing municipal solid waste under this scheme.
The following firms are eligible for financial support under the scheme:
- Public Sector Companies
- Cooperatives Society
- Partnership Firm
- Registered Companies
- Proprietorship Firms
- Government-owned Firms/Companies
Financial Assistance Details
As part of the Scheme to Support Promotion of Biomass-Based Cogeneration in Sugar Mills and Other Industries, central financial assistance is provided as described below:
- For bagasse cogeneration projects, the central financial assistance (CFA) of Rs.25 lakh/MW will be issued as part of the scheme.
- Financial assistance of Rs.50 Lakh/MW will be provided for Non-bagasse Cogeneration project
Calculation of Financial Assistance
The calculation of central financial assistance for bagasse cogeneration projects will be based on the surplus exportable power as described in the Power Purchase Agreement (PPA) or Appraisal Report.
The calculation of central financial assistance for non-bagasse cogeneration projects is based on the machine installed capacity.
Condition for Financial Assistance
- Central Financial Assistance will be back-ended and the grant will be released in one instalment after successful commissioning and commencement of commercial generation & performance testing of the plant.
- The Central Financial Assistance will be released to the term loan account for reducing the loan component of the promoter.
- According to the scheme, no advance financial assistance will be released to support the development of Biomass-Based Cogeneration in sugar mills
- The financial assistance is provided for projects which will be installing the new turbine and boiler.
- The applicant must have availed term loan from any of the following financial institutions to get financial assistance under the scheme:
- National Bank of Fujairah
- Public Sector Banks
- Private Sector Banks
- Central Cooperative Banks
- State Cooperative Banks
Note: If the firms have not availed the term loan, Central Financial assistance will not be provided.
To avail the financial assistance, the project developers need to follow national and international standards for equipment utilized in their project. The promote need to confirm the following equipment standards in the biomass-based cogeneration projects.
ASME – BPVC – Section – 1
ASME PTC 6.2
Rotating Electrical Machines
Timeline for completion of the project
Promoters need to complete the cogeneration plant project within 2 years from the date of sanction of financial assistance.
Note: Another six months extension will be provided without penalty at the level of Secretary Ministry of New and Renewable Energy (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, the sanction order for grant of CFA will be cancelled.
The documents required for availing the Central Financial Assistance is listed as follows:
- The power purchase contract document
- Loan Sanction letter
- Appraisal note
- Project reports
- Project site photograph
- Purchase Orders of the Boiler and rotary machine (Turbine)
The applications for the Scheme to Support Promotion Of Biomass Based Cogeneration will be invited every quarter.
- To avail financial assistance of the scheme, the developers need to submit the Detailed Project Report (DPR) and application form in prescribed format to the Ministry through lead Financial Institution (FI).
- The applicant should furnish a document along with the above-described documents. The documents should contain the following details and it should duly notarized.
- The applicant needs to mention the that cogeneration project plant will be operated for a period of ten years
- The cogeneration plant should be utilizing the fossil fuel
- To get the CFA, promoters should have not availed financial assistance or subsidy for the cogeneration power plant from the Ministry of New and Renewable Energy or any other Central Government Ministry.
- The promoter needs to make a presentation before the Project Appraisal Committee (PAC) for availing the CFA.
- After reviewing the presentation, the Project Appraisal Committee will issue sanction letter for granting financial assistance.
- The sanction letter will be issued with the approval of the Integrated Finance Division (IFD) and Secretary. Prior sanction letter from the Ministry is required for availing financial assistance.
Post by Renu Suresh
Renu is experience content writer specialised in compliances and company rules.