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3.0 Central Financial Assistance (CFA)

Central Financial Assistance in the form of capital subsidy would be provided to biomass gasifier projects and biomass co-generation projects based on conventional duels and their rejects, Central Financial Assistance would be provided only for promotional and awareness creation activities. The details of Central Financial Assistance and other provisions are given below:

3.1 Capital subsidy for Biomass Gasifiers for thermal and electrical applications.

1. Rs. 2.0 lakh / 300 KWth for thermal applications.
2. Rs. 2.5 lakh/100 KWe for electrical applications through dual fuel engines.
3. Rs. 8.00 lakhs / 100 Kwe for 100% producer gas engines with gasifier system.
4. Rs. 6.00 lakhs / 100 KWe for 100% producer gas engine alone.

3.2 Capital subsidy for Biomass Co-Generation (non-bagasse) projects

Capital subsidy @ Rs. 20.00 lakh/MWe would be provided to promoters for installation for Biomass Co-generation (non-bagasse) projects, including captive based on direct combustion.

3.3 The capital subsidy will be considered subject to the following:-

1. The amount of capital subsidy would be calculated on the basis of installed capacity.
2. CFA would be limited to a maximum capacity of 5KW, irrespective of the installed capacity of the project.
3. In case of Special Category States (NE Region, Sikkim, J&K, Himachal Pradesh and Uttaranchal), 20% higher capital subsidy than that of General category States would be provided.

3.4 Incentives for the installation of so-generation projects based on conventional fuels and rejects.

Promotional incentives @ Rs. 1.00 lakh/MW, subject to maximum of Rs. 5.00 lakh/project for professional technical services would be provided to consultancy firms helping to bring a project to financial closure including preparation of DPR.

3.5 CFA for technology validation, strategic studies, industrywise sectoral studies, and performance monitoring & evaluation etc.

CFA upto Rs. 5.0 lakhs, on case-by-case basis, would be considered for technology validation, strategic studies, industry-wise sectoral studies and performance monitoring & evaluation etc. to institutions / industries. This will be governed by the producers / guidelines being issued by the R & D Division of MNRE separately.

4.0 Implementation Arrangements

4.1 The project will be implemented by private and public sector industry, including through Energy Service Companies (ESCOs), in which case the ESCO would be eligible for the CFA.

4.2 IREDA, other financial institutions or commercial banks shall forward the Detailed Project Reports received from the promoters / ESCOs) to the Ministry along with their Appraisal Note indicating the techno-economic availability of the project, taking into account the eligible capital subsidy. The promoters would be required to also submit an advance copy of their proposal to the Ministry directly. The prescribed formal for submission of the proposal is given in the Annexure.

4.3 For projects to be implemented by the promoter without debt financing / loans from domestic Fls / banks, the proposals should be directly submitted to the Ministry for financial support.

4.4 After receipt of DPR from promoters, Appraisal Note and copy of loan sanction order from IREDA/lead bank / FI, and other requisite information / documents from the promoters, the proposal will be examined in the ministry and sanction will be issued for providing capital subsidy in accordance with the provisions of scheme.

5.0 Release of Central Financial Assistance (CFA)

5.1 The entire capital subsidy amount would be released of off setting the loan amount after successful commissioning of project as per DPR norms and receipt of copies of statutory clearances and requisite project relating information / documents. The condition of successful commissioning of the project would inter-alia imply operation of the project for three months, including at least 72 hours continuous operation at minimum 80% of rated capacity.

5.2 In case the project is set up by the promoters through their own resources, the CFA would be released directly to promoters after successful commissioning of the project (as per item 6.1 above)

5.3 The incentives to State Nodal Agencies would be released after successful commissioning of the project.