4        This sanction  order has been recorded at  the  serial no. 1 in the page no. 39 of  the Register of  Grants.

         Thanking you,

                                                                         Yours faithfully,

( R.N. SAWANT )

     DIRECTOR

To,

1.           Secretary, Department of   Science  &  Technology,  Technology  Bhawan, New  Mehrauli   Road,  New  Delhi – 110 016 .

2.           Chairman,  Technology  Development  Board,  Department of   Science  &  Technology,  Technology  Bhawan, New  Mehrauli   Road,  New  Delhi – 110 016 .

3.          Director General,  Council of   Scientific   and  Industrial  Research,  Anusandhan  Bhawan,  Rafi Ahmed Kidwai Marg, New  Delhi – 110 001.

4.          Secretary, Department of Bio-Technology, CGO Complex, Lodi Road, New Delhi – 110 003.

5.          Secretary, Ministry of Environment and Forests, Paryavaran Bhawan, CGO Complex, Lodi Road, New Delhi – 110 003.

6.          Secretary, Ministry of Information Technology, Electronics Niketan, CGO Complex, Lodi Road, New Delhi – 110 003.

7.          Secretary , Department of Atomic Energy, Mumbai.

8.          Secretary, Department of Space, Bangalore.

9.          Chief  Executives of all State Nodal  Agencies in the country .

10.       Secretary General , Federation of  Indian  Chambers of  Commerce &  Industry,   Federation  House,   Tansen  Marg,  New Delhi – 110 001 .

11.    Secretary General, The Associated Chambers of Commerce & Industry of  India, 11, Community  Centre,   Zamroodpur ,  New  Delhi – 110 048

12   Director General,   Confederation of  Indian  Industry,  23,   Institutional Area, Lodi  Road,  New  Delhi – 110  003.   

13.   President ,Indian Agro Paper Manufacturers’ Association , 709 , Pragati Tower,   26 , Rajendra Place , New Delhi – 110 008.

14.   President, Indian Paper Manufacturers’ Association, PHD House, 4^th Floor, Opposite Asian Games Village, New Delhi – 110 016

15.   President,   Indian   Solar  Photovoltaic  Manufacturers’ Association, C/o    Tata BP  Solar  India  Pvt  Limited,  Plot  No. 78,  Electronics  City, Hosur Road,  Bangalore – 561 229.

16.  President, Indian Wind Turbine Manufacturers’  Association,  ABACUS Business  Centre,  Unit No. 10,  Second Floor,  Raja Annamalai Building, 19,  Marshall Road,  Egmore,  Chennai – 600 008.

17. President,  Solar  Energy Equipment Manufacturers’ Association, 41, S.V.  Cooperative,  Industrial  Estate,  Balanagar,  Hyderabad – 500 037 .

18. Managing Director,  Indian  Renewable  Energy  Development Agency Ltd., Core IV-A, First Floor,   East  Court, India  Habitat Centre Complex,  Lodi  Road, New  Delhi – 100 003.

19. Chairman  &  Managing  Director,  Industrial  Development   Bank of  India, IDBI  Tower,  WTC  Complex,  Cuffe  Parade,  Colaba,  Mumbai – 400 005 .

20. Chairman  &  Managing  Director,   Industrial Credit  &   Investment  Corporation of   India  Ltd.,  C-23, G  Block, Bandra-Kurla  Complex, Bandra (East) ,  Mumbai-400 051.

21. Director, Non-Conventional  Energy  Equipment Manufacturers’ Association of  India,  Number 57, Montieth Road, Chennai – 600 008.

22. Principal   Director of  Audit,  CW &M-II  (Scientific  Departments),   DGCR Building,  IP  Estate,  New Delhi – 110 002.

23. All members of the NETCOF Committee ( as per the list attached as  Annexure VI) .

24.  All Regional Offices of the  Ministry of   Non-Conventional Energy  Sources  (As per the list attached as  Annexure VII )  .

Copy also to :

1.     PS to the Minister of  State ( Independent  Charge) for Non-Conventional Energy Sources

2.     Sr. PPS to the Secretary

3.     Additional Secretary  &  Financial  Adviser, MNES

4.     Senior Adviser

5.     Adviser (SE)/ Adviser (RE) / Adviser (Power) / Adviser (SEC) / Adviser  (U&I ) /  Joint  Secretary  (IR, SHP, P&C, NETCOF / R&D  and IREDA)

6.     All Directors, MNES

7.     Deputy Director (OL), for translation in Hindi

8.     SSO (IR)

9.     Section Officer   (IR) 

10.  Guard File

( R.N. SAWANT )

                                                                                 DIRECTOR                     

 Scheme on Non-Conventional  Energy  Technology  Commercialization  Fund, 2001 – 2002

1        INTRODUCTION

1.1  During the  past decade and a half,  various  reputed   R&D   and academic institutes  in the country have been active in the development of  new  Non-Conventional Energy (NCE) technologies for  commercial  applications .  The  commercialization   of these technologies has, however, not been commensurate  with the efforts put in, primarily because the country’s  NCE industry has not been able to support the commercialization  of  new technologies, given the risks involved in untested areas of  investment.

1.2 The need for creating  a  fund for supporting those activities of the NCE industry and  various R&D  / academic  institutes in the country that aim at commercializing new technologies has, therefore, been felt for a  long time.

1.3 The Ministry of  Non-Conventional Sources has, accordingly, launched , with effect from  the year 2000-2001, a  new  Scheme i.e. Non-Conventional Energy Technology  Commercialization Fund (NETCOF).  The NETCOF has been created  in the Indian  Renewable Energy Development Agency Ltd (IREDA),  New Delhi. The Scheme has been approved for implementation  upto the end of the Ninth Five Year Plan, i.e. upto the 31^st of  March, 2002, with its continuance in the Tenth Five Year Plan being  subject to a  review of  its performance during  the  2-year period of its implementation  in the Ninth  Five Year Plan.

2          OBJECTIVES

2.1     The objectives of the Scheme are as follows:

2.1.1      Supporting the commercialization of indigenously developed NCE technologies.

2.1.2   Supporting the setting-up of pilot plants for the manufacture of NCE   systems/products/devices, with a view to expedite their commercialization.

2.1.3  Supporting   rapid   commercialization of imported NCE technology for widespread   domestic use.

2.1.4   Adaptation/modification to processes/products based on imported  technology to    enable to  adapt to  the domestic as well as the international market.

2.1.5  Development of innovative products/technologies, which are in early stages of their life cycle but which  hold substantial potential for growth and return.

3        PROJECTS ELIGIBLE TO RECEIVE FINANCIAL ASSISTANCE

3.1    Projects that aim at achieving one or more of the above objectives shall be eligible to receive financial support under the NETCOF Scheme.

3.2     The guiding principle for supporting project proposals under the Scheme would be the production of a commercially viable NCE product or generation of energy by an enterprise/company/Institute of repute and its marketability.

3.3           The Scheme will give preference to project proposals envisaging financial support from existing companies in production  which have a proven track record of reasonable profitability.

3.4    A close liaison  would  be  maintained with the  Technology Development  Board  (TDB) of the  Department of  Science  &  Technology.  The TDB   often gets    project  proposals having components of  renewable   energy and these could be   fruitfully   passed on to  this  Ministry for   funding.

3.5   For the generation of  suitable projects,  proper publicity  and networking with the    industry would be  required .

3.6  The Scheme shall give preference to those project proposals that are not covered by any other on-going Scheme of the Ministry.

4          APPLICANTS ELIGIBLE TO SEEK FINANCIAL ASSISTANCE

4.1       The following shall be eligible to seek financial assistance under the NETCOF Scheme:

(i)            Companies incorporated under the Indian Companies Act, 1956.

(ii)          R&D Institutes of repute such as the laboratories of the Council of Scientific and Industrial Research, Government of India, in collaboration with the industry.    

(iii)        Academic institutes of repute such as the Indian Institutes of Technology and the  Indian Institute of Science, Bangalore, in collaboration with the industry. 

5         THE NETCOF COMMITTEE

5.1       A   committee, called the NETCOF Committee,  has been constituted to:

Ø     Analyse, examine and evaluate  the  project  proposals received for

       this  assistance .

Ø    To recommend/reject, project proposals that are submitted to it by the NETCOF Cell.

Ø    Recommend the maximum amount of funding to be provided to any given project proposal, by the NETCOF,     together with the quantum and type of  financial  assistance to be   made  available  for a  recommended project,  viz.  the  mix of equity and/or loan and/or grant-in-aid ,etc. to be provided.

6        COMPOSITION OF THE NETCOF COMMITTEE

6.1       The composition of the NETCOF Committee is  as follows:

v    Composition

6.2    The following are the  terms of reference of the NETCOF   Committee   that    have  been   drafted   in   line  with those of the  Ministry’s  R&D  Advisory Committee :

Ø    The NETCOF  Committee shall make  recommendations with regard to the project proposals that are submitted to it by the Ministry’s NETCOF Cell for the grant of  assistance under the Scheme on NETCOF.

Ø    It shall regularly  review  the implementation of  all those projects that have been supported by the Ministry under the Scheme on  NETCOF.

Ø    It shall  discuss  and recommend, to the Ministry, the strategy, as well as the short and long term goals, for the commercialization of   NCE technologies. 

Ø    It shall discuss and recommend, to the Ministry, the type of institutional arrangements and monitoring systems that are suitable for an early  realization  of the objectives of the Scheme on NETCOF.

Ø    It shall discuss and recommend, to the Ministry, the  priorities  to be adopted under the Scheme  on  NETCOF.

Ø    It shall also recommend the  maximum amount of  funding ( subject to a  ceiling of 75% of the total project cost as  appraised by the lead FI ) to be provided to any given project proposal, by the NETCOF, together with the quantum  and type of   financial assistance to be  made available for a  recommended  project, viz. the mix of   equity  and / or loan and / or grants-in-aid, etc, to be provided.  

v         Functioning  of the  Committee

       The NETCOF  Committee  shall function as per the  terms and guidelines that have been drafted in line with  those   of the  Ministry’s  R&D  Advisory Committee:

(i)           The  NETCOF   Committee  will be guided by the Ministry’s  Scheme on NETCOF, that has been approved by the Commission for Additional Sources of Energy in its 62nd meeting held on the 24^th  of  July, 2000.

            (ii)      The  tenure  of  the   NETCOF    Committee   shall,   at  present,  be  co-terminus  with  that  of  the   Scheme on  NETCOF, viz. from the date of  issue  of  the  Office  Memorandum  notifying  its   constitution (24^th  of  April, 2001) upto    the  31^st of  March, 2002.

(iii)     The  NETCOF   Cell   shall   serve   as   the   Secretariat  to  the NETCOF    Committee.

(iv)      All  non-official and official members  and special invitees  (if any) –

that attend the meetings of the NETCOF Committee – shall be eligible  for the on - the - spot payment / reimbursement of  travelling allowance, daily allowance and sitting fee as per the existing rules of the Government of  India .

 (v)     The Committee shall meet as frequently as required, but at least once  every six months.

      (vi)   The  Constitution   of  the  Committee  shall  be reviewed by the Ministry from time – to – time. The Committee shall have the discretion to co-opt additional Members as and when required and also to  invite special invitees to attend its meetings, if it feels necessary.  The special invitees could include representative(s) of the Financial Institution(s) [FIs] from which the term loan (s) has/have been sought by the applicant for the project’s implementation and the Head of that Group of the Ministry that deals with the subject area of the proposed project.                                                                                    

7         THE NETCOF CELL

7.1     A  Cell   has been created in the Ministry  to  exclusively  look-after  the implementation of the  Scheme on   NETCOF.  The said   Cell is currently headed by  an  officer of the rank of  Director, who is  assisted by   one  Senior Scientific Officer-I .

7.2     The NETCOF Cell  is being manned by redeployment from the existing strength of the Ministry.

7.3     The NETCOF Cell  is functioning  as the Secretariat to the NETCOF Committee.  

8          MODE OF IMPLEMENTATION

8.1     The Scheme is being implemented by the Ministry  primarily through the IREDA and also  through  other  FIs like the IDBI / the ICICI who run    venture   capital   fund   schemes. The  applicant will apply to the

           IREDA or to the concerned  FIs  for seeking financial assistance   under the Scheme by submitting a Detailed Project Report (DPR) covering all technical, financial and legal aspects of the proposed project.  No assistance shall be provided to the applicant for the preparation of the DPR.  

8.2      The applicant will also be required to submit all relevant details in a prescribed format (Annexure-I) that has been devised by the Ministry.   Simultaneously, the applicant will also send a copy of the filled-in-application format to the NETCOF  Cell of the Ministry.  The concerned FIs can also  prescribe separate  application forms for their  appraisal  purpose.

8.3     The FI(s) shall appraise the project proposal and send its/their appraisal report (s) to the Ministry.  In addition to appraisal by the FI(s), the concerned Programme Division/Group   of   the Ministry   will also  be 

            required  to give its  detailed opinion on the scientific and technical content of the project proposal. The Group/Division would be specifically required to examine the technical aspects of the project vis-à-vis the objectives of the Scheme and see whether the same are fulfilled.  If felt necessary, views of  outside technical &  financial  experts may also be obtained. The inputs thus received from the FI(s) and   the   Ministry’s   concerned   Programme  Division/Group will be

           assimilated and submitted to the NETCOF Committee by the NETCOF Cell of the Ministry, together with its technical comments and recommendations. The broad  methodology   to be followed  will be same as that of   the  R&D  Advisory Committee of the Ministry.

8.4     The NETCOF Committee will carefully examine all aspects of the project proposal and decide upon whether or not the project is to be supported by the Scheme.  The Committee will also recommend the maximum amount of funding to be provided to the project, by the Ministry, together with the funding pattern (viz. the mix of equity and /or  loan   and/ or  grant-in-aid,  etc.).    To   arrive   at   a   decision, the

            Committee may, if it so feels, ask the applicant to make a presentation  of  the project proposal during its meeting and give clarifications regarding the proposal.

8.5     Based on the NETCOF Committee’s recommendation, the NETCOF   Cell shall process the project proposal for issuing the sanction order.

8.6      It shall    be the sole responsibility of the applicant - who shall also be the project promoter - to tie-up the finances for the project and ensure its financial closure, as also the legal formalities.

8.7     The disbursal of funds shall be made  through  the IREDA or any other FI which is  co-financing the project and which has appraised the project report.  

9        CREATION OF  THE  NETCOF  

9.1     The NETCOF has been created in the IREDA by  releasing the   Budgetary Provision made by the Ministry for this purpose, during the last financial year, viz. 2000-2001.   If felt necessary, this fund can also be  replenished  from other sources  approved by the Ministry.   As for  the targets for the 9^th   Plan, the funding shall be at a  level of   Rs. 2.00 crores per year, subject to further funding by the Planning Commission during   the   10^th    Plan.    During   the    first    year   of   the Scheme’s

           implementation, i.e. 2000-2001, a  fund of Rs.2.00 crores has been placed with the IREDA. The IREDA shall maintain a separate account for the NETCOF and shall also provide regularly, to the Ministry, the corresponding financial statements. The implementing/administering agency of the NETCOF   and the Scheme shall be the Ministry through the NETCOF Committee/Secretariat.  This channelizing of funds through the IREDA’s bank account shall be reviewed at the end of every  year. 

9.2     All releases to the applicant shall be proportionate to the   disbursal of the term loan instalments to that applicant, by the FI that has sanctioned the term loan to the project.  In case term loans are sanctioned to the project by more than one FI, then funds from the NETCOF  shall be released to the applicant in proportion to the disbursal of the term loan instalments, to the applicant, by the lead FI, viz. the FI that sanctions the maximum amount of term loan to the project.

9.3     A separate budget head has been created for the NETCOF Scheme.  This budget head  shall  be administered by the NETCOF Secretariat in accordance with the recommendations of the NETCOF Committee.

9.4     The Ministry shall sanction the eligible funds to any project recommended  by  the  NETCOF  Committee only after the project has

            achieved financial closure. For this purpose, the date of financial closure shall be reckoned as the date of sanction of the term loan, to the project, by the lead FI. 

10          FUNDING PATTERN

10.1    Depending upon the recommendations of the NETCOF Committee, funds to be provided under the Scheme to  the  applicant can be in the form   of   a  suitable mix of the  following   components as  decided by

             the Committee,  subject  to a   ceiling  of   75% of  the   total project cost as  appraised  by the lead FI   :

(i)      Equity   and/o