TIIC Generator Scheme
TIIC Generator Scheme
Tamil Nadu Industrial Investment Corporation Limited has introduced Generator scheme to provide financial assistance for MSME units to purchase generator set. The purpose of the Generator Scheme is to promote the captive power generation of new and existing MSME units in the State. In this article, we look at the TIIC Generator Scheme in detail.
The following entities are eligible to avail the benefits under the generator scheme:
- Any new and existing Micro, Small and Medium Manufacturing Enterprises are eligible to get financial assistance under the scheme.
- Also, Proprietors/Partnership concerns/Private Limited/Public Limited companies are eligible to apply for the scheme.
Eligible Accessories for Subsidy
- The accessories required for erection and functioning of the generator set would be considered as one unit for computing the generator subsidy.
- The new generator set purchased for replacement of old generator or to have additional capacity also eligible for the subsidy.
Note: The loading, unloading, erection and packing charges will not be considered for subsidy.
The maximum loan amount can be obtained as per the requirements of the project cost.
The promoter contribution under the generator scheme will be the rate of 35% of the value of the total project cost.
Debt Equity Ratio
The debt-equity ratio fixed for the borrowers will be 2:1, including existing term loan.
Rate of Interest
The interest charged for the loan amount will be at the rate of 12.20% for new customers and 11.95% for existing customers.
- Interest can be paid either on every month or quarterly.
- In the case of any default, penal interest of 2.50% per annum will be imposed for the defaulted period.
The amount of loan has to be repaid within five years, including moratorium period of six months.
- For assisted units in a standard category, no collateral security is required.
- For assisted units not in standard category for the last three years, collateral security of 20% of the loan amount is required from the borrowers.
- For units not assisted by the TIIC, to the extent of 50% of the generator loan amount is obtained.
- The assistance will be provided only for brand new equipment.
- The safety certificate has to be obtained from the Electrical Inspectorate Department for installing a new generator at the factory premises.
- The generator set should be purchased directly from the manufacturer or from the dealer recognised by the manufacturer.
- The industrial units must have obtained valid entrepreneur memorandum.
Time Limit for Submission of Application
The application for the generator scheme should be filed to the General Manager, District Industries Center of respective Districts with six months from the date of installation of generator set or purchase of the generator set.
The applicant has to provide the registration fee at the time registration of the application.
- The Registration Fee of Rs.5,000 has to be paid if the loan is processed by the Branch Sanction Committee (BSC).
- The Registration Fee of Rs.25,000 has to be remitted if the Head Office processes the credit.
Along with the registration fees, the applicant is requested to make an investigation fee before the prescribed sanction committee sanctions the loan proposal.
|Loan Amount||Investigation Fee|
|Loans up to Rs.10 lakhs||Rs.5000|
|Loans above Rs.10 lakhs and up to Rs.50 lakhs||Rs.10000|
|Loans above Rs.50 lakhs and up to Rs.100 lakhs||Rs.30,000|
|Loans above Rs.100 lakhs and up to Rs.200 lakhs||Rs.40,000|
|Loans above Rs.200 lakhs and up to Rs.300 lakhs||Rs.50,000|
|Loans above Rs.300 lakhs and up to Rs.5000 lakhs||0.20% of the loan amount|
|Loans above Rs.2000 lakhs||Rs.5 lakhs|
The following are the documents to be attached along with the application form.
- Copy of Memorandum and Articles of Association.
- Business Commencement Certificate.
- Copy of firm registration certificate and partnership deed.
- Net worth statement of proprietor, partner, director and guarantor.
- Audited balance sheet.
- Last three years profit and loss account of the applicant.
- Performa invoice for the purchased generator set.
- Installed capacity and calculation detail.
- Copy of safety certificate from the Electrical Inspectorate Department.
- Any other document, if required.
Application Procedure for Generator Scheme
For availing subsidy from TIIC, the applicant has to apply in the prescribed application which is available in all the TIIC office. On completion of an application with the mandatory details, submit it to the same office along with the documents required. The concerned authority will release the loan amount once your application is approved.
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Release of Subsidy
The subsidy under the scheme would be released by the concerned General Manager to the financial institution, in case of term loan facility availed by the MSME. In respect of self-financed enterprises, the subsidy would be released directly to the enterprises.
Refund for Rejection of Loan
In the event of a denial of the loan application, the prescribed fee will be refunded as given below:
- The investigation fee paid in terms of the second instalment will be considered for refund at the rate of 50% on fees paid if the applicant withdraws the proposal before sanction. However, the initial registration fees will not be refunded.
- If the corporation rejects the loan application or the applicant withdraws the application after the sanction of loan, no reimbursement will be entertained.
- No refund of investigation fee will be allowed if the applicant availed the loan in 50% concession already.
Also, read the TIIC Working Capital Scheme