Modi Govt approved loan subsidies for 47 ethanol projects in Bihar

The central government has informed Parliament that 47 projects in Bihar have received in-principle approval for interest subvention on bank loans aimed at establishing new distilleries or expanding existing ones.

Currently, Bihar has 22 operational ethanol distilleries, including eight molasses-based and 14 grain-based units, Minister of State for Food Nimuben Jayatibhai Bambhaniya stated in a written response to the Lok Sabha.

Recently, Bihar Deputy Chief Minister Samrat Choudhary had said that Bihar requires more ethanol plants which is important to benefit the farmers growing maize, rice and other cereals as they could sell them directly to the ethanol plants. He said that this will generate more income and ensure availability of funds.

The government is implementing the Ethanol Blended Petrol (EBP) Programme across the country, enabling Oil Marketing Companies (OMCs) to sell ethanol-blended petrol. As part of this initiative, the government aims to achieve 20% ethanol blending with petrol by 2025-26.

Ethanol Interest Subvention

To enhance ethanol production capacity and meet blending targets, the Centre introduced several Ethanol Interest Subvention Schemes between 2018 and 2022. The minister held that under these schemes, 47 projects in Bihar have been granted preliminary approval.

For each Ethanol Supply Year (ESY), OMCs invite bids from distilleries based on available feedstocks. Following the bidding process, OMCs allocate ethanol quantities to be supplied by distilleries during the ESY. In cases where feedstock shortages occur, OMCs accommodate requests for feedstock changes and revise allocations accordingly.

I Am Renew reported recently that the Muzaffarpur district of Bihar would be the setting up three new ethanol plants and the construction has been planned by three different companies. As per reports, these companies have submitted proposals to the state’s Department of Industries, which have been forwarded to the Bihar State Investment Promotion Board for approval.

Prime Minister Modi also laid the foundation stone of the major grain-based ethanol projects of HPCL Biofuels Limited (HBL) in Bihar’s Sugauli and Lauria.