Five projects to contribute 23cr litres of ethanol per annum
The Oil Marketing Companies (OMCs), project proponents and Banks have entered into a long-term purchase agreement (LTPA) for upcoming dedicated ethanol plants across India. Five projects are expected to contribute around 23 crore litres of ethanol per annum.
The first set of Tripartite-cum-Escrow Agreement (TPA) was signed among OMCs, Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Limited (HPCL), the Ministry of Petroleum and Natural Gas said on 11 May 2022.
State Bank of India, Indian Overseas Bank and Indian Bank are three banks involved in the tripartite agreement with OMCs and project proponents.
The agreement is designed to ensure that payment received by Ethanol plants is utilized for servicing the finance extended by these Banks.
As per the agreement, ethanol produced by these dedicated ethanol plants shall be sold to OMCs for blending with petrol as per the Government’s Ethanol Blended Petrol (EBP) Program.
Payment towards supply of ethanol shall be credited to escrow account maintained with the financing bank to ensure servicing of loan as per schedule.
TPAs were signed with Bihar’s Micromax Biofuels Pvt Ltd, Eastern India Biofuels Pvt Ltd, Muzaffarpur Biofuels Pvt Ltd as well as Madhya Pradesh’s K P Biofuels Pvt Ltd, and Visag Biofuels Private Limited.
In Ethanol Supply Year 2021-22, India achieved 9.90% ethanol blending, consuming 186 crore litres of ethanol, saving over Rs.9,000 crores of foreign exchange to be spent on import of fuels.
However, the Government has advanced the target of achieving 20% blended ethanol by 2025, which is commonly known as E20 target.
The major challenge is the deficit of ethanol to achieve this target.
As per E20 scenario, the country requires 1,016 crore litres of ethanol to achieve the target in 2025-26. But there is a deficit of approx. 650 crore litres of ethanol as per the current availability.
Ethanol blended petrol not only give us cleaner environment as it produces 38 % lesser carbon dioxide emission, as well as, support rural economy with investment in rural areas and employment generation. fiinews.com
