Subsidised Loan Scheme for Cooperative Sugar Mills’ Ethanol Units
Why in the news
The Centre opened an interest-subsidy scheme to cooperative mills, earlier limited to private firms, for upgrading ethanol distilleries to use grain and corn along with molasses.
Key facts
- Beneficiaries: about 63 cooperative mills with distilleries.
- Terms: 50% interest subvention or 6%, whichever is lower; five years including a one-year moratorium.
- Lender: mostly NCDC at about 8.5%, so the effective rate is about 4.25%.
- Conversion costs ₹50-60 crore per plant.
| Aspect | Before | After |
|---|---|---|
| Feedstock | Molasses | Molasses, grains, corn |
| Running period | 4-5 months | Plus 2-3 months |
Significance
- Supports the Ethanol Blending Program, cuts sugarcane dependence and aids energy security.
Exam angle
- Lender: NCDC; subvention: 50% or 6%.