Loan from Sugar Development Fund for conversion of existing ethanol plant into zero liquid discharge plant

By | November 14, 2015

MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION

(Department of Food and Public Distribution)

NOTIFICATION

New Delhi, the 9th November, 2015

G.S.R..847(E).—In exercise of the powers conferred by sub-section (2) of section 4 read with sub-section (2) of section 9 of the Sugar Development Fund Act, 1982 (4 of 1982), the Central Government hereby makes the following rules further to amend the Sugar Development Fund Rules, 1983, namely :—

1. Short title and commencement.-

(1) These rules may be called the Sugar Development Fund (Amendment) Rules, 2015.

(2) They shall come into force on the date of their publication in Official Gazette. 2. In the Sugar Development Fund Rules, 1983, (hereinafter referred to as the principal rules), in rule 7, in subrule (1), after the figures “22”, the figures and letter “22A” shall be inserted.

3. In the principal rules, in rule 22, in sub-rule (4), in clause (b), for the Explanation,

The following Explanation shall be substituted, namely:-

“Explanation. – For the purposes of this clause and clause (b) of sub-rule (3) of rule 22A,-

(A) “refinancing” includes availing of loan for repayment of loan taken from any financial institution or scheduled bank before applying to a Financial Institution or bank for appraisal in which Fund component is proposed, but shall not include a ‘bridge loan’ taken in lieu of Fund component after submitting an application to the Standing Committee on Fund;

(B) “bridge loan” means a short loan from any Financial Institution in lieu for Fund loan and the same shall be repaid on disbursement of the same.”

4. In the principal rules, after rule 22, the following rule shall be inserted, namely:-

“22A. Loan for conversion of existing ethanol plant into zero liquid discharge plant.-(1) Any sugar factory of an undertaking having an installed capacity of two thousand five hundred Tonnes crushed per day or higher to which financial assistance has been approved by a Financial Institution or a scheduled bank for it to implement a project for conversion of existing ethanol plant into zero liquid discharge plant by installing the required plant and machinery shall be eligible to apply for loan under this rule:

Provided that ten per cent of the project cost shall be met by the sugar factory of an undertaking from its own internal generation of fund as part of the promoters contribution required by the Financial Institution or the scheduled bank.

(2) A sugar undertaking which is in default of payment that has become due in respect of the Fund and the Levy Sugar Price Equalisation Fund relating to any of the sugar factories or units under it shall not be eligible to apply for a loan under this rule.

(3) A sugar undertaking shall not be eligible to apply for a loan under this rule for any of the following reasons or purposes, namely; –

(a) if loan is with respect to a second hand project, equipment or machinery: Provided that a sugar undertaking shall be eligible to apply for a loan for a project where second hand equipment or machinery has been used or is proposed to be used, subject to the following conditions, namely:-

(i) use of such second hand machinery or equipment shall not change the overall character of the project, which shall essentially consist of new plant, machinery and equipment;

(ii) it shall technically be certified that the use of the second hand machinery or equipment shall not affect the overall efficiency and life of the project;

(iii) the useful life of the second hand machinery or equipment so used shall not be less than the term of repayment of sugar development fund loan;

(iv) subject to fulfilment of conditions specified in sub-clauses (i) to (iii), the estimated or actual cost of machinery or equipment which are not new shall be deducted from the estimated or actual cost of the project before arriving at the eligible project cost for the purpose of Fund loan;

(b) refinancing;

(c) financing of cost over run;

(d) project commissioned prior to the date of application under these rules;

(e) if such sugar undertaking is a defaulter in respect of repayment of loan availed under Fund or in payment of any dues under the Levy Sugar Price Equalisation Fund in respect of any of its sugar factories.

(4) (i) The Committee may, with the previous approval of the Central Government make any class or classes of sugar undertaking ineligible for loan under this rule:

(ii) The sub–committee or Committee shall record the reasons in writing if it decides that an applicant is not eligible for loan.

(5) An eligible sugar undertaking under this rule, shall make an application to the Committee in Form VII-A in duplicate along with a copy each of its balance sheet and profit and loss account for the last three consecutive years preceding the year in which the application is made.

(6) (i) All applications made under sub-rule (5) shall first be placed before the sub-committee;

(ii) The Member- Secretary of the Committee, who shall be the Convener of the Committee, shall call a meeting of the sub-committee once in a month where there is application for loan. (iii) The sub-committee shall consider the application and all other relevant factors and give its recommendation for the consideration of the Committee in its next meeting.

(7) It shall be open to the Committee and the sub-committee to call for any further information from the applicant or refer the matter to an expert or group of experts or expert organisations to make an investigation and report on any aspect relating to the application before making their recommendations. (8) (i) The Committee shall after taking into account the recommendations of the sub-committee, and after considering the information or report obtained by the Committee under sub-rule (7), if any, and all relevant aspects, make its recommendations as to the amount of loan that may be made to the sugar undertaking

(ii) The Committee may also, with the previous approval of the Central Government; issue directions to the subcommittee to make a recommendation directly to the Central Government on the amount of loan that may be made to the sugar undertaking.

(9) In respect of a sugar undertaking that has applied for a loan, falling under this rule, the Central Government may after consideration of the recommendation of the Committee and any other relevant factor with view to improving its viability, authorise payment of such amount of loan not exceeding the amount required by the Financial Institution or the scheduled bank, as the case may be, to be contributed by such sugar undertaking as promoters’ contribution as may be determined by the Central Government.

(10) The amount of loan authorised under sub-rule (9) shall be disbursed by the Central Government to the sugar undertaking or paid by it to the Financial Institution or the scheduled bank, as the case may be, for disbursement to the sugar undertaking either in lump sum or in instalments as may be considered necessary by the Central Government.

(11) The Financial Institution or the scheduled bank, as the case may be, shall treat the amount authorised as a part of the promoters’ contribution.

(12) (i) The loan from the Fund along with the interest due thereon shall be recovered in half-yearly instalments not exceeding eight in number.

(ii) The repayment of the loan with interest thereon shall commence after the expiry of one year reckoned from the date of each disbursement of the loan from the Fund.

(13) (i) The disbursement of the loan authorised by the Central Government under sub-rule (9) shall be preceded by a tripartite agreement between the Central Government, the sugar undertaking and the Financial Institution or the scheduled bank, or a bilateral agreement between the Central Government and the sugar undertaking, as the case may be.

(ii) The agreement referred to in clause (a), shall contain the terms and conditions with regard to the utilisation of the loan including monitoring of the implementation of the project by an agency designated by the Central Government in this behalf, the period of repayment including the number and amount of instalment, payment of interest, the manner of such repayment or payment, security to be provided for the loan and any other matter incidental to the loan.

Explanation.- For the purpose of this rule, the expression “sugar factory” includes any unit thereof (which may or may not be within the premises of the sugar factory) used for production of anhydrous alcohol or ethanol from alcohol or from molasses for which raw material is supplied by such sugar factory in accordance with the norms specified by the Committee in this behalf.”

5. In the principle rules, in rule 24, in sub rule (1), after the figures “22”, the figures and letter “22A” shall be inserted.

6. In the principle rules, in rule 25, in sub rule (1), after the figures “22”, the figures and letter “22A” shall be inserted.

7. In the principle rules, in rule 26, in sub rule (1), after the figures “22”, the figures and letter “22A” shall be inserted

Form VII A (see sub-rule (5) of rule 22A)

Application for Financial Assistance from the Fund for implementing projects for Zero Liquid Discharge (ZLD)

[F. No.11-18/2015-SDF]

PRASHANT TRIVEDI, Jt. Secy. (S&SA)

Note:- The principal notification was published in the Gazette of India vide notification number G.S.R. 752(E) dated 27th September, 1983 and was last amended vide notification number G.S.R. 210(E) dated 8th April, 2013.

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