Cooperative development body okays INR 98.93-bln loans for co-op sugar mills
This story was originally published at 12:38 IST on 20 March 2025
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NEW DELHI – The National Cooperative Development Corp. has sanctioned loans worth INR 98.93 billion to 48 cooperative sugar mills so far, Minister of Cooperation Amit Shah said in a written reply to the Rajya Sabha. The cooperative development body will raise funds from the market to provide financial assistance of INR 100 billion to cooperative sugar mills, Shah added.
Under the grant-in-aid scheme to strengthen cooperative sugar mills, the government has provided a grant of INR 10 billion to the cooperative development body during FY23 and FY25. The grant will support mills in setting up ethanol plants, cogeneration plants, or for working capital requirements.
For ease of availing loans, the cooperative development body has revised its funding pattern to 90:10 from 70:30. Sugar mills have to raise only 10% of the project cost and 90% will be provided by the cooperative development body. Further, for the benefit of cooperative sugar mills, the floating interest rate for term loans has been reduced to 8.5% under the scheme, Shah said.
To ensure year-round ethanol supply from cooperative mills, the government recently announced an interest subvention scheme exclusively for cooperative sugar mills. The scheme will help cooperative mills expand to multi-feedstock-based ethanol plants from the existing sugarcane-based units.
On Mar. 6, the government announced interest subvention of 6% per annum or 50% of the interest rate charged by financial institutions, whichever is lower, for five years, including a one-year moratorium. Additionally, oil marketing companies are prioritising cooperative sugar mills while allocating ethanol supply orders in 2024-25.
So far, 24,650 kilolitres of ethanol worth INR 255 million has been procured from 11 cooperative sugar mills, Shah said. End
Reported by Afra Abubacker
Edited by Avishek Dutta
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