{"id":42964,"date":"2022-05-05T11:14:29","date_gmt":"2022-05-05T05:44:29","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=42964"},"modified":"2023-04-10T18:49:10","modified_gmt":"2023-04-10T13:19:10","slug":"ireda-ncef-refinance-scheme","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/","title":{"rendered":"IREDA NCEF Refinance Scheme (Revised Version)"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The scheme envisages reviving the\noperation of the current projects dealing with the Biomass Power &amp; Small\nHydro Power by reducing the funding cost via refinance at the concessional\ninterest rate, with funds secured from NBEF, i.e. National Clean Energy Fund.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#Scope_of_the_IREDA_NCEF_Refinance_Scheme\" >Scope of the IREDA NCEF Refinance Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#_Financing_Structure_under_the_IREDA_NCEF_Refinance_Scheme\" >&nbsp;Financing Structure under the IREDA\nNCEF Refinance Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#Rate_of_Interest\" >Rate of Interest<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#Repayment_timeline\" >Repayment timeline<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#Institutions_eligible_for_IREDA_NCEF_Refinance_Scheme\" >Institutions eligible for IREDA NCEF Refinance Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#List_of_non-eligible_entitiesprojects_for_IREDA_NCEF_Refinance_Scheme\" >List of non-eligible entities\/projects for IREDA NCEF Refinance Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#Step_by_Step_Process_of_Registering_under_the_IREDA_NCEF_Refinance_Scheme\" >Step by Step Process of Registering under the IREDA NCEF Refinance Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/ireda-ncef-refinance-scheme\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Scope_of_the_IREDA_NCEF_Refinance_Scheme\"><\/span>Scope of the IREDA NCEF Refinance Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Technology: Small Hydro Power (SHP) &amp;\nBio-mass combustion-based grid-connected power generation projects.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"_Financing_Structure_under_the_IREDA_NCEF_Refinance_Scheme\"><\/span>&nbsp;Financing Structure under the IREDA\nNCEF Refinance Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Under\nthe Scheme, IREDA would facilitate funding coming from NCEF via refinance to\nscheduled commercial banks and other allied avenues, including IREDA, w.r.t\ntheir lending to the aforesaid category of Renewable Energy projects.<\/li><li>Refinance\nnot surpassing 30 per cent of the outstanding loans (including FITL, if any) of\naforesaid projects&#8217; category in the books of scheduled commercial\nbanks\/financial avenues (including IREDA) would be made accessible to them at a\nreduced interest rate by the IREDA. But, the maximum refinance amount has been\ncapped at Rs. 15 Crs per project.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rate_of_Interest\"><\/span>Rate of Interest<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The interest rate on the refinance shall\nbe 2 per cent\/annum. The scheduled commercial Banks\/FIs are liable to\nfacilitate the refinanced component of the loan at the interest rate of two per\ncent per annum<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Repayment_timeline\"><\/span>Repayment timeline<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Tenure of refinance repayment timeline\nfor the refinance sum should be co-terminus with the repayment timeline of\nbank\/FIs for that project &amp; the max. repayment timeline shall be ten years\napart from 6 m moratorium from the date of release of refinance amount.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Institutions_eligible_for_IREDA_NCEF_Refinance_Scheme\"><\/span>Institutions eligible for IREDA NCEF Refinance Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Scheduled commercial banks and financial\navenues would stand eligible for the refinance scheme. IREDA would handle the\nentire affairs of this scheme and has the sole authority to pinpoint the\navailability and refinance&#8217;s the extent<\/p>\n\n\n\n<p>The scheduled commercial banks \/FIs shall\nbe required to meet the given parameters to qualify for the refinance scheme:<\/p>\n\n\n\n<ol><li>The SB\/FIs should not accrue losses\nduring the last three years.<\/li><li>Gross NPAs should be lower than or equal\nto 5% of the entire portfolio of the lending agency. The condition shall not\napply to State\/ Central PSU Banks\/Govt. NBFC&#8217;s\/ Govt. FIs.<\/li><li>The\ncapital adequate ratio should be in line with the underlying regulatory norms. <\/li><\/ol>\n\n\n\n<p><strong>Other\neligibility conditions:<\/strong><\/p>\n\n\n\n<ol><li>Operational\ngrid-connected power generation projects: <\/li><li>Combustion\noriented Biomass power projects (Upto installed capacity of 10 Mega Watts)* <\/li><li>All\nSmall Hydro Power Projects (upto installed capacity of 25 Megawatts)**<\/li><\/ol>\n\n\n\n<p>* In the case of combustion oriented\nBiomass Power, the projects of more than 10 Mega Watt may also be taken into\naccount, but the refinance sum will be limited to the threshold as per pro-rata\nbasis upto 10 Mega Watt only, subject to maximum refinance sum that can be secured\nas per the scheme, i.e. Rs. 15 Crores.<\/p>\n\n\n\n<p>** Subject to max. refinance sum that can\nbe secure as per the scheme, i.e. fifteen crores rupees. <\/p>\n\n\n\n<ul><li>Projects viability hindered, on account of tariff, fuel cost issues and Force majeure conditions<\/li><li>The project should be examined\/functionalized post utilization of the NCEF refinance loan.<\/li><li>Plants must be functional for at least two years post-project commissioning, and the two year&#8217;s average PLF (in the event of operated functioning for more than two years, the average PLF of any two years) should be a minimum of 20 per cent of Biomass Power and 15 per cent in case of small hydropower (SHP) projects.<\/li><li>Refinance does not surpass 30 per cent of the loan outstanding at the rate of two per cent interest rate from IREDA to schedule CBs\/FIs, and the same shall be extended by the banks\/FIs to the project developers at the identical rate of two per cent subject to, max. Refinance sum Rs 15 crores\/project.<\/li><li>The project must have a minimum of average DSCR of 1.1 posts considering the IREDA refinance amount and should be able to service the loan.<\/li><li>The project should be functionalized\/ revived within six months from the disbursement&#8217;s date; in case Bank \/ FI does not facilitate the confirmation of the plant&#8217;s revival within six months, the refinance granted may be recalled, and the sum must be refunded to issuance authority in one go. But, in some cases, an additional timeline of up to one year, apart from above six months, might be given for functionalization\/revival of projects, subject to sharing of viable reasons\/justifications by banks\/FIs to the <strong>IREDA&#8217;s <\/strong>satisfaction.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"List_of_non-eligible_entitiesprojects_for_IREDA_NCEF_Refinance_Scheme\"><\/span>List of non-eligible entities\/projects for IREDA NCEF Refinance Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The given categories of\nentities\/promoters\/projects shall stand ineligible for the refinance scheme.<\/p>\n\n\n\n<p>a) Declared wilful defaulters, in\naccordance with the RBI regulations<\/p>\n\n\n\n<p>b) Declared Non \u2013 cooperative borrowers,\nin accordance with the RBI regulations<\/p>\n\n\n\n<p>c) Projects remained non-functionalized\nfor the last five years.<\/p>\n\n\n\n<p>d) Company with a net profit in view of\nthe latest Audited Balance sheet\/ Annual Report shall stand ineligible,\n[Companies with Net Loss fit to the scheme despite having the Cash Profits at\nthe disposal] <\/p>\n\n\n\n<p>e) Projects\/Loans which secured OTS, i.e.\nOne Time Settlement, would stand ineligible<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_by_Step_Process_of_Registering_under_the_IREDA_NCEF_Refinance_Scheme\"><\/span>Step by Step Process of Registering under the IREDA NCEF Refinance Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Sanction of refinance<\/em><\/strong><\/p>\n\n\n\n<p>A scheduled commercial bank \/ FIs willing\nto access the refinance scheme shall file their loan request with IREDA after\nfulfilling the underlying requirements<\/p>\n\n\n\n<p>IREDA shall issue a notification cum letter confirming the refinance&#8217;s sanction after inspection and authorization of the refinancing proposal.<\/p>\n\n\n\n<p><strong><em><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/legal-templates-and-notices\">Legal <\/a>documentation<\/em><\/strong><\/p>\n\n\n\n<p>The SCBs\/FIs intending to secure\nrefinance scheme should provide the following documentation;<\/p>\n\n\n\n<ol><li>A resolution copy validated by the BODs or any other competent committee or specific authorization from the qualified authority to secure refinance from <strong>IREDA<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.ireda.in\/home\"><strong>[1]<\/strong><\/a><\/sup> and to execute documentation in favour of IREDA.<\/li><li>Concerned officials&#8217; signature<\/li><li>The SCBs\/FIs shall execute an agreement for securing refinance and such other documentation as may be required.<\/li><\/ol>\n\n\n\n<p><strong><em>Application for disbursal<\/em><\/strong><\/p>\n\n\n\n<p>Following the approval and arrangement of\nthe legal documents, including the security for refinance, the SCB\/FI may apply\nfor the release of refinance w.r.t eligible outstanding loans\npost-commencement\/revival of the project. The application shall furnish\nparticular relating to the eligible loans disbursed and the outstanding amount\nby the SCB\/FI w.r.t which refinance is being sought from IREDA.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Biomass Power &amp; Small Hydro Power Projects often have trouble preserving their existence due to fiscal issues. IREDA NCEF Refinance Scheme resolves this critical issue by providing necessary financial aid to such projects in India.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/tac-certificate-for-automobile\/\">TAC Certificate for Automobile \u2013 An Overview\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The scheme envisages reviving the operation of the current projects dealing with the Biomass Power &amp; Small Hydro Power by reducing the funding cost via refinance at the concessional interest rate, with funds secured from NBEF, i.e. National Clean Energy Fund. Scope of the IREDA NCEF Refinance Scheme Technology: Small Hydro Power (SHP) &amp; Bio-mass [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":42966,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[153],"tags":[2318],"acf":{"service_id":"220"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":2836,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/42964"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=42964"}],"version-history":[{"count":9,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/42964\/revisions"}],"predecessor-version":[{"id":54844,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/42964\/revisions\/54844"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/42966"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=42964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=42964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=42964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}