• Page last updated on: 19 November 2020
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Sugar Development Fund (SDF) Schemes in brief

  • Under the Sugar Development Fund Act, 1982 and Sugar Development Fund Rules, 1983, loans are given to sugar factories, inter-alia, for five schemes viz.
  1. Modernization Cum Expansion of sugar factory
  2. Cane Development
  3. Bagasse based Co-generation power projects
  4. Production of Anhydrous Alcohol or Ethanol from alcohol or molasses
  5. Conversion of existing plant to Zero Liquid Discharge Plant.
  • The loans carry a concessional rate of interest at the rate 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 the maximum value of scheme of ₹ 6.00 Crores.
  2. Sugar Undertaking: Minimum of 10% of the total cost of the Scheme.

Modernisation/Rehabilitation

  • Under SDF Rules, 1983 (Rule 16 and 16A), a 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 seven & 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 three years reckoned from the date of disbursement of SDF 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 installments not exceeding ten in number.

Cane Development

  • Under SDF Rules, 1983 (Rule 17 and 17A), a loan is provided to a sugar factory fordevelopment of sugarcane in the area in which any sugar factory is situated.
  • 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: -
  1. Setting up of Heat Treatment Plants.
  2. Rearing of Seed Nurseries
  3. Irrigation Schemes (Drip Irrigation only)
  • 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.
  • Repayment of principal shall be in eight equal half-yearly installments after the expiry of the moratorium period (three years for principal amount reckoned from the date of the disbursement of each installment). Interest on the loan shall  be paid half yearly after expiry of one year from the date of disbursement of loan.

Bagasse based Co-Generation power project

  • Under SDF Rules, 1983 (Rule 23), a loan is provided to any sugar factory having an installed capacity of 2500 TCD or higher to implement a project of bagasse-based co-generation of power.
  • proposal for modernization-cum-expansion project integrated with co-generation plant or ethanol plant of any sugar factory of an undertaking having an installed capacity of less than 2500 tones Crushed Per Day but not less than 1250 tones Crushed Per Day and to which financial assistance has been approved as provided in sub-rule (1), shall also be eligible to apply for loan under this rule, subject to inter-alia the following conditions, namely:
  1. such project shall be technically appraised by the National Sugar Institute, Kanpur or any other institute recognized by the Central Government and it has certified that the project is technically viable.
  2. State Government guarantee is furnished by the sugar factory or sugar undertaking for Sugar Development Fund loan.
  • 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 installments 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 installment of the repayment of the principal.

Production of Anhydrous Alcohol or Ethanol from Alcohol or Molasses

  • Under SDF Rules, 1983 (Rule 22), a 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 to improve its viability.
  • proposal for modernization-cum-expansion project integrated with co-generation plant or ethanol plant of any sugar factory of an undertaking having an installed capacity of less than 2500 tones Crushed Per Day (TCD) but not less than 1250 tones Crushed Per Day (TCD) and to which financial assistance has been approved as provided in sub-rule (1), shall also be eligible to apply for loan under this rule, subject to inter-alia the following conditions, namely:
  1. Such project shall be technically appraised by the National Sugar Institute, Kanpur or any other institute recognized by the Central Government and it has certified that the project is technically viable.
  2. State Government guarantee is furnished by the sugar factory or sugar undertaking for SDF loan.
  • Period of Loan is a maximum of four & a half years.
  • Repayment of the loan with interest thereon shall commence after the expiry of one year reckoned from the date of each disbursement of loan and shall be repaid in half-yearly installments not exceeding 8 in number.

Conversion of existing Ethanol Plant into Zero Liquid Discharge

  • Under SDF Rules, 1983 (Rule 22A), a loan is provided to any sugar factory having an installed capacity of 2500 TCD or higher for conversion of existing ethanol plant into zero liquiddischarge (ZLD) plant by installing the required plant and machinery.
  • proposal for modernization-cum-expansion project integrated with co-generation plant or ethanol plant of any sugar factory of an undertaking having an installed capacity of less than 2500 tones Crushed Per Day but not less than 1250 tones Crushed Per Day and to which financial assistance has been approved as provided in sub-rule (1), shall also be eligible to apply for loan under this rule, subject to inter-alia the following conditions, namely: 
  1. such project shall be technically appraised by the National Sugar Institute, Kanpur or any other institute recognized by the Central Government and it has certified that the project is technically viable.
  2. State Government guarantee is furnished by the sugar factory or sugar undertaking for Sugar Development Fund loan.
  • Period of Loan is a maximum of four & a half years.
  • Repayment of the loan with interest thereon shall commence after the expiry of one year reckoned from the date of each disbursement of loan and shall be repaid in half-yearly installments not exceeding 8 in number.