Government has notified scheme for extending financial assistance to project proponents for enhancement of ethanol distillation capacity or to set up distilleries for producing 1st Generation (1G) ethanol from feed stocks such as cereals (rice, wheat, barley, corn & sorghum), sugarcane, sugar beet etc. vide notification dated 14.01.2021. Under the scheme, Government would bear interest subvention for five years, including one year moratorium, against the loan availed by project proponents from banks @ 6% per annum or 50% of the rate of interest charged by banks, whichever is lower, for setting up of new distilleries; expansion of existing distilleries; converting existing distilleries to dual feedstock; setting up of new dual feed distilleries; expansion of existing dual feed distilleries; and installation of Molecular Sieve Dehydration (MSDH) column etc.

During previous Ethanol Supply Year (ESY) 2019-20 (December- November), about 173 crore litre of ethanol was supplied by sugar mills and distilleries to Oil Marketing Companies (OMCs). In the current ESY 2020-21, against Letter of Intent (LoI) quantity of 324.69 crore litre and contracted quantity of 269.88 crore litre, about 48.73 crore litre of ethanol has been supplied to OMCs, as on 01.02.2021.

State Governments/ UTs have been advised to promote the scheme to the entrepreneurs and encourage them to participate in the scheme so that the target set by the Government could be achieved well within the timeline. State Governments have also been requested to facilitate entrepreneurs in arranging land for the project, getting early environment clearance etc. in setting up of distilleries. In this regard, webinars/meetings have been organised with State Governments/ UTs, industry, concerned departments of Central Government and other stakeholders.

This information was given in a written reply by the Union Minister of State for Consumer Affairs, Food and Public Distribution, Shri Danve Raosaheb Dadarao in Lok Sabha today.

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