Ref: RFC/MTC-131/460������������������������������������������������� Dated 06.08.2004


Sub: Scheme for financial assistance to Wind Farm/ Wind Turbine Generator.

The �Board of Directors in its meeting held on 21.6.04 has decided to adopt the scheme to provide financial assistance to Wind Farm/ Wind Turbine Generator. The scheme is enclosed. Since the scheme will be operated through Technical Cell, all field offices are �required to forward applications alongwith required documents� to DGM(Technical Cell).

Field offices are also advised to contact good borrowers, established� entrepreneurs, profit making� ventures and educate them regarding long term benefits of this project like low cost of generation, no recurring cost of fuel and very low O&M cost, 80% depreciation allowed in 1st year, exemption from income tax for 10 years and electricity duty for 5 years etc. Specially, these projects are environment friendly and entrepreneurs can put up these projects without disturbing �their present activity/ manpower.

All concerned are, therefore, advised to popularize this scheme and garner maximum business under the scheme.

(Sanjay Dixit)
Chairman & Managing Director�



Financing of wind farm and individual Wind Turbine Generator (WTG) may be considered. Eligibility criteria and other salient features of the scheme are as under:

  • Eligibility Criteria:

A borrower may establish wind farm or individual WTG for captive use of generated power or may sell the generated power to JVPNL (SEB/Power company)/Third party� through power purchase agreement (PPA).

Borrower Means:

  1. Proprietorship concern
  2. Partnership firm
  3. Pvt.Limited or Limited company
  4. Co-operative society.
  • Primary Security:�
  1. Exclusive first charge by way of hypothecation/mortgage on fixed assets in favour of the Corporation.
  2. Personal guarantee of promoters.
  3. Deposit of post dated cheques towards payment of instalments of principal loan amount and for instalments of interest payable thereon.
  4. Escrowing of power proceeds ie. exclusive charge on trust and retention account to be opened with any commercial bank for receipt of sale proceeds/revenue of power sold and the said account shall be opened before drawal of first instalment of loan.
  • Additional Security:

May be required based on financial parameters of the project.
(a)Collateral security on case to case basis depending upon merits and demerits of individual case and promoters.
(b)Second charge on the existing fixed assets of the company.

  • Promoter�s contribution:

The minimum promoter�s contribution shall be 33% and the same is to be invested before first disbursement of loan.

  • Amount of assistance:

Loan from Rs.50.00 lac to Rs.1000.00 lac can be considered under this scheme.

  • Moratorium period:

The moratorium period shall not exceed twelve months from the date of first��� disbursement. �����������������������������������

  • Financial parameters:

(a) Project debt/equity ratio������������ - Not to exceed 2:1
(b) Project DSCR������������������� �������� - 1.6 or more������

  • Repayment period:

The loan shall be repayable in ten years ; including moratorium period not exceeding one year.

  • Rate of interest:

The Corporation shall charge interest @ 11.25%

  • Rebate:

Rebate for timely payment @ 1.50% shall� be provided to the borrowers. However, no rebate shall be applicable in cases covered under TUF.

  • Effective rate of interest:

For non TUF cases�����������������- 9.75%
For cases covered under TUF� - 6.25% (subject to availability of 5% subsidy for timely payment on TUF cases from Ministry of Textiles, Government of India).

  • Processing charges:

The borrower shall pay processing charges @ 1.20% of sanctioned loan amount; before issuing sanction letter.

  • Liquidated damages:

The liquidated damages shall be levied on the amount of default for the period of default. Failure to pay instalments/interest on due dates would attract 3.00% penal interest in addition to the normal interest rate.

  • Mode of payment:

The borrower shall furnish 37 PDCs for the payment of principal loan amount which shall fall due quarterly for the repayment period. Payment of interest shall also be made separately through PDCs. From 2nd to 4th year, 25% of principal loan amount and from 5th to 10th year, 75% of principal loan amount would be recovered from the borrower by way of balooning method.� The first instalment of interest shall fall due on the first day of quarter ie March, June, September and December. �����������������������������������

  • Application fee:
  1. Application form fee-�� 100/-.
  2. Application fee

����� upto Rs.1.00 crore��� - 10,000/-
����� above Rs.1.00 crore� to upto Rs.5.00 crore - Minimum 10,000/- + 5000/-
���������������������������������������������� for every crore or part thereof.
����� Above Rs.5.00 crore to upto Rs.10.00 crore � Minimum 30,000/- +��6000/-
�����������������������������������������������for every additional crore or part thereof.

  • Sanctioning authority:

H.O., as per� existing delegation of powers.

  • Disbursement:

The loan shall be disbursed in the following manner:

  1. Ist instalment: Maximum upto 50% of sanctioned loan amount may be released after arrival and verification of entire Plant and machinery at site by a technical officer of Technical Cell. Necessary invoices and receipts of advance payment� made to WTG supplier� and also transport receipts are to be submitted with verification request by the promoters of the unit.
  2. IInd instalment: shall be released after receiving a certificate regarding erection, installation and commissioning of WTG from Jodhpur Vidyut Prasaran Nigam Limited ( JVPNL/ concerned DISCOM) and WTG supplier through borrowers; after final verification of plant and machinery, to be carried by a team of two officers; comprising one officer from technical discipline� and one from finance discipline� belonging to Technical Cell.
  3. In the matter of follow up and delegation of powers, the DGM(Technical)/� incharge of Technical Cell will enjoy same powers as delegated to DGM(F)/ GM(F).
  • Recovery:

For the purpose of recovery, same procedure as prescribed vide letter No. RFC. F. GBD/ Gen. 25/2195 dt. 21.5.04 for GBD cases shall be applicable� except that all cases having default exceeding two quarters shall be monitored by Technical Cell. All such cases with full details and recommendations shall be referred to DGM(Technical).

  • Availing of refinance & TUF benefits:

Work related to availing refinance from Rural Electrification Corporation ( REC) and TUF benefits from �Ministry of Textile�/ IDB/SIDBI shall be looked after by Finance Section.

  • Wheeling Arrangements:

Approval from RVPNL/concerned DISCOM is to be obtained for wheeling arrangements before first disbursement of loan in case of captive consumption of power.

  • Lease deed:

Notarised photocopy (true copy) of lease deed executed between Government of Rajasthan and WTG supplier/Land Developer Company will be submitted before first disbursement. The period of lease would be 30 years. �����������������������������������������������������������������������

  • Sub Lease Deed:
  1. Sub lease deed of 19 years between borrower and WTG supplier/Land Developer Company would be mortgaged to the Corporation after 90 days of commissioning of the plant (WTG).
  2. 10% of eligible disbursement of loan amount will be made after creation of mortgage of sub leased land in favour of the Corporation.
  • Power Purchase Agreement (PPA):
  1. PPA agreement is to be made between borrower and JVPNL/concerned DISCOM/Third party before first disbursement of loan.
  2. An Escrowing (Trust and Retention) account is� to be opened with a commercial bank by the borrower; for receipt of sale proceeds/revenue of power revenue The said account shall be opened before first disbursement of loan. Through this account, the Corporation will have the first charge on the sale proceeds/revenue of power revenue.
  • Borrower shall obtain permission for establishing wind power plant from RREC/State Government before sanction of loan.
  • Condition regarding manufacturers of Wind Turbines:

�The borrower shall give an undertaking to the Corporation and shall satisfy the Corporation that the manufacturer of wind turbine shall provide self certification about the quality and performance of their equipments. They will be penalized if their machines are found not to perform as per the performance certified by them. This clause is stipulated by the Government of India in the Ministry of Non Conventional Energy Sources ( MNES) as per the new guidelines and certificate is to be obtained from machine manufacturers by the borrower. Further the borrower has to take care of this clause as per its project needs and stipulate necessary penalty clause in the contract/ agreement with machinery supplies. The� borrower shall certify that they have complied/ ensured compliance of the guidelines of MNES to the satisfaction of the Corporation�.