Assistance is available for all commercially viable plants manufacturing biomass pellets, torrefied pellets, briquettes, and Refuse-Derived Fuel (RDF).

Loan Eligibility:

• The minimum eligible loan amount from IREDA is ₹50 lakh.
• Loan quantum is linked to the project cost as per the following structure:
  • Project Cost up to ₹5 Crore: Loan up to 70% of project cost
  • Project Cost above ₹5 Crore up to ₹10 Crore: Loan up to 60% of project cost
  • Project Cost above ₹10 Crore: Loan up to 50% of project cost
• A minimum promoter contribution of 30% of the project cost is required.

Interest Rate:

The interest rate for Biomass Power projects under the IREDA Credit Risk Rating System (CRRS) varies by project grade:

• Grade I: 10.25%
• Grade II: 10.75%
• Grade III: 11.15%
• Grade IV: 11.45%

Note: Rates are subject to periodic revision by IREDA’s Interest Rate Fixation Committee, and the applicable rate will be based on the rate prevailing at the time of each disbursement.

Repayment Period & Moratorium:

• The repayment period can extend up to a maximum of 6 years, based on project cash flows and the project’s Debt Service Coverage Ratio (DSCR), commencing after project completion and a moratorium period of up to 12 months from the Commercial Operation Date (COD).

Security Requirements:

• The company must provide exclusive or pari passu charges (in cases of co-financing) via equitable mortgage and hypothecation on plant machinery and movable assets.
• A pledge of at least 51% of the applicant company’s shares is required.
• Additional securities may include collateral security, corporate or personal guarantees, third-party guarantees, Post-Dated Cheques (PDCs), a demand promissory note, and a bank guarantee or Fixed Deposit Receipt (FDR) amounting to at least 10% of the loan, subject to IREDA’s satisfaction.
• Revenue from the sale of pellets, briquettes, or RDF, if any, must be routed through a Trust and Retention Account (TRA) with an exclusive charge on the account. In co-financing cases, a pari passu charge may be allowed.

Fees and Charges:

• Applicable as per IREDA’s financing guidelines.

General Conditions:

• Biomass pellet, torrefied pellet, briquette, and RDF manufacturing plants must be commercially viable.
• Biomass resource availability and site-specific survey reports must be submitted.
• A market survey report identifying potential pellet/briquette buyers near the site is required.
• The borrower must provide all necessary information and documents for goods, services, and works financed by IREDA, in accordance with standard commercial practices.
• Any subsidy or grant provided by the Central or State Government will be adjusted against the loan sanctioned by IREDA.
• Interest subvention or subsidy from the State/Central Government, if available, will be passed on to the project.
• Additional terms and conditions will follow IREDA’s prevailing financing norms and guidelines.