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SDF Schemes in Brief


Under Sugar Development Fund Act, 1982 and Sugar Development Fund Rules, 1983, loans are given to sugar factories, inter-alia, for five scheme viz. (i) Modernization Cum Expansion of sugar factory, (ii) Cane Development, (iii) Bagasse-Based Cogeneration power projects, (iv) Production of Anhydrous Alcohol or Ethanol from alcohol or molasses and (v) conversion of existing plant to Zero Liquid Discharge plant. The loans carry a concessional rate of simple interest of 2% below the Bank Rate.

The provisions of SDF loans for all types of loans (except Cane Development Loan) for Brownfield project, is as per following funding pattern: -

1. Scheduled Bank/Financial Institution – 50% of the total project cost.

2. Promoters contribution – 10% of the total project cost.

3. SDF component – 40% of the eligible project cost.

However, where the owner’s contribution/ equity is increased beyond 10%, there will be a corresponding decrease in the SDF loan component. In respect of Greenfield projects for Co-generation and Ethanol Projects, the SDF contribution is 20% of the eligible project cost.

In respect of Cane Development, the provisions of SDF Loans are as per the following pattern: -

1. SDF: 90% of the total cost of the Scheme subject to a maximum of Rs.6.00 Crores.

2. Sugar Undertaking: Minimum of 10% of the total cost of the Scheme.


Modernization/Rehabilitation:

Under SDF Rules, 1983 (Section 16 and 16A), the loan is provided for facilitating the rehabilitation and modernization of any sugar factory or any unit thereof, including to a potentially viable sugar undertaking. Period of Loan is a maximum of nine & a half years. Repayment of principal along with interest thereon shall commence after the expiry of one year from the date of repayment/payment of Financial institution/Bank term loan and interest thereon or on the expiry of a period of five years reckoned from the date of disbursement of fund loan, whichever is earlier, in accordance with the provisions of Rule 16 (9) (iv) of the Sugar Development Fund Rules as amended from time to time, in half-yearly instalments not exceeding ten in number.


Cane Development:

Under SDF Rules, 1983 (Section 17 and 17A), the loan is provided to a sugar factory for development of sugarcane in the area in which any sugar factory is situated, including to a potentially viable sugar undertaking. SDF loan is provided to the Sugar undertakings on the recommendation of concerned State Government for the development of sugarcane for the following schemes presently: -

a) Setting up of Heat Treatment Plants.

b) Rearing of Seed Nurseries

c) Irrigation Schemes (Drip Irrigation only)

The Financial assistance is available for one or more of the above schemes. The main purpose is to make adequate sugar cane available to the sugar undertakings so that production of sugar increases. Period of Loan is a maximum of six & a half years. A moratorium of three years reckoned from the date of the disbursement of each instalment, which shall be the date of the ECS. Repayment of principal shall be in eight equal half yearly instalments after the expiry of the moratorium period.


Bagasse based Co-Generation power project:

Under SDF Rules, 1983 (Section 23), the loan is provided to any sugar factory having an installed capacity of 2500 TCD or higher to implement a project of bagasse-based cogeneration of power. Period of Loan is a maximum of seven & a half years. Repayment of the loan shall commence after the expiry of three years reckoned from the date of each disbursement of loan and shall be repaid in half-yearly instalments not exceeding 10 in number. The interest on the said loan shall be paid half-yearly for the first three years from the date of each disbursement of the loan after which it shall be paid half-yearly along with the instalment of the repayment of the principal.


Production of Anhydrous Alcohol or Ethanol from Alcohol or from Molasses

Under SDF Rules, 1983 (Section 22), the loan is provided to any sugar factory having an installed capacity of 2500 TCD or higher for production of anhydrous alcohol or ethanol from alcohol or molasses with a view to improving its viability.

Period of Loan is a maximum of four & a half years. Repayment of the loan shall commence after the expiry of one year reckoned from the date of each disbursement of loan and shall be repaid in half-yearly instalments not exceeding 8 in number. The interest on the said loan shall be paid annually for the first year from the date of each disbursement of the loan after which it shall be paid half-yearly along with the instalment of the repayment of the principal.


Conversion of existing Ethanol Plant into Zero Liquid Discharge:

Under SDF Rules, 1983 (Section 22A), the loan is provided to any sugar factory having an installed capacity of 2500 TCD or higher for conversion of existing ethanol plant into zero liquid discharge (ZLD) plant by installing the required plant and machinery. Period of Loan is a maximum of four & a half years. Repayment of the loan shall commence after the expiry of one year reckoned from the date of each disbursement of loan and shall be repaid in half-yearly instalments not exceeding 8 in number. The interest on the said loan shall be paid annually for the first year from the date of each disbursement of the loan after which it shall be paid half-yearly along with the instalment of the repayment of the principal.