No.
10/3/2005-UICA
Government
of India
Ministry
of New and Renewable Energy
(Urban
Industrial and Commercial Applications Group)
Block
No. 14, CGO complex
Lodi
Road, New Delhi 110003
Date:
25.07.2005
To
Subject: Accelerated Programme on Energy
Recovery from Urban Wastes – Sanction for the Year 2005-06 - Regarding.
Sir,
I
am directed to convey the sanction of the Government of India for the
implementation of ‘Accelerated
Programme on Energy Recovery from Urban Wastes’ during the year 2005-2006.
The scheme provides for financial assistance for setting up of projects
for recovery of energy from urban wastes and incentives to State Nodal
Agencies. The scheme also
provides for grants-in-aid for organizing seminars, workshops, training
courses, etc. on the subject of energy from urban wastes.
The details of this programme are given below:
1.1
The expenditure on this scheme will be met from the provisions under
Demand No. 65 for 2005-06, as per the following details:
|
Major
Head 2810 |
|
60.103 |
Energy
from Urban and Agricultural Waste (Minor Head)
|
|
01 |
Energy
from Urban/ Municipal Waste |
|
01.00.31 |
Grants-in-aid |
Rs.
100 lakh |
|
01.00.33 |
Subsidies
|
Rs.
700 lakh
|
2.
OBJECTIVES
2.1
The main objectives of the proposed National Programme on Energy
Recovery from Urban Wastes are as follows:
-
To
accelerate the promotion of setting up of projects for recovery of
energy from urban wastes;
-
To
create conducive conditions and environment, with fiscal and financial
regime, to develop, demonstrate and disseminate utilisation of wastes
for recovery of energy; and
-
To
harness the available potential of MSW-to-energy by the year 2017.
3.
IMPLEMENTATION ARRANGEMENTS
3.1
The Scheme shall be implemented by Municipal Corporations, other Urban
Local Bodies, Govt. Institutions and Private Developers having technical and
managerial capabilities for implementing such projects.
In cases where debt financing is involved, IREDA, financial
institutions, or commercial banks shall forward the proposals to MNRE,
along with their Appraisal Notes and all the statutory clearances.
An advance copy of the proposal may be sent to MNRE directly.
In case of the self-financed projects, requests accompanied with
Detailed Project Reports and all the statutory clearances will need to be sent
to MNRE before the commencement of execution work for the project.
4.
DETAILS OF FINANCIAL ASSISTANCE
4.1
Financial Assistance (FA) to be provided for projects based on
different technologies and wastes will be as given below
Commercial
projects for MSW in fast track mode
4.2
Projects for power generation from MSW through a two-stage
process involving production of RDF by processing of MSW and it’s combustion
for generation of power are proposed to be taken up in a fast track mode.
The strategy includes development of projects for specific cities and
inviting bids from project developers and entrepreneurs for setting up these
projects on Public Private Partnership basis.
The developers will be selected on the basis of a bid for minimum
amount of financial assistance (or ‘viability gap’ funding) within an
overall ceiling of Rs 1.50 crore per MW.
Thus, the financial assistance to be provided for each project will be
determined through a process of competitive bidding after preparing a Detailed
Project Report (DPR). State
Nodal Agencies, Municipal Corporations or other professional organizations
such as IL&FS, IREDA, HUDCO, TCOs etc, will carry out the project
development and bidding through a transparent tendering process.
Projects
based on high rate biomethanation technology
4.3
Financial assistance of Rs. 2.0 crore / MW will be provided for
projects based on power generation from MSW through high rate biomethanation
technology.
Demonstration
projects for power generation from MSW through new technologies
4.4
With the objective of developing indigenous capabilities as well as
for demonstration of various new and emerging technologies, financial
assistance will be provided to the extent of 50% of the project cost, subject
to a maximum of Rs. 3.0 crore / MW for setting up demonstration projects based
on gasification / pyrolysis and plasma arc technologies.
Power
generation at sewage treatment plants
4.5
Financial assistance @ 40% of the project cost subject to a maximum of
Rs 2.0 crore/MW shall be provided for projects for generation of power from
biogas being produced at Sewage Treatment Plants.
Project cost will include the cost of engine-genset, H2S
removal plant and other related equipment.
Power
generation from other urban wastes
4.6
Financial assistance @ 50% of project cost subject to upper limit of Rs.
3.0 crore / MW shall be provided for setting up projects based on
biomethanation technology for power generation from cattle dung, vegetable
market and slaughterhouse wastes generated in the urban areas.
For cattle dung based projects, eligible project capacity would be 250
kW and above. In case of projects
for generation of only biogas for thermal application, the FA will be limited
to Rs. 1.0 crore / MWeq (i.e. biogas production of 12000 cu.m / day).
Other
Provisions
4.7
Any waste of renewable
nature or biomass can be mixed to the extent of 25% with MSW.
4.8
Financial assistance provided for any single project will be limited to
Rs 8.0 crore for projects in different categories covered under paras 4.2 to
4.6.
4.9
Financial assistance of 20% higher than those specified for different
categories of projects will be provided for projects in North Eastern Region
and Special Category States, namely, Himachal Pradesh, J&K, Sikkim and
Uttranchal.
5.
PROMOTIONAL INCENTIVES
Project
Development Assistance
5.1
The programme for fast track promotion of projects for power generation
from MSW involves development of a project document for specific cities for
determining the capital subsidy required as viability gap funding through a
process of competitive bidding. It
is expected that State Nodal Agencies, HUDCO, IREDA, IL&FS, TCOs etc, will
develop the projects with the help of consultants, as necessary, for the
Municipal Corporations and Urban Local Bodies.
Project Development Assistance of Rs 10 lakh per project can be
provided for this activity involving the following:
·
Analysis of MSW and assessment of quantity;
·
Identification of project site;
·
Preparation of MSW collection and transportation plan
·
Finalisation of tie-up with the ULBs for land lease and supply of
waste;
·
Finalisation of power purchase agreement;
·
Development of a bankable project with Feasibility Report and the DPR;
·
Preparation of the bid document for inviting bids for viability gap
funding;
·
Firming up of means of project finance;
·
Assistance in entire process of bidding;
·
Obtaining all statutory clearances for the projects; and
·
Providing assistance and supervision during execution and
commissioning.
In case of other projects, financial assistance of
50% of the cost of preparation of Detailed Project Reports subject to a
maximum of Rs 1.00 lakh per project will be provided.
This assistance will be released at the time of sanction of financial
assistance for the project.
Incentive
to State Nodal Agencies
5.2
An incentive of 1% of the MNRE’ financial assistance with an
upper limit of Rs. 5.00 lakh per
project, shall be payable to the State Nodal Agencies (SNA) to facilitate the
development and implementation of the projects and monitoring for a period of
one year after commissioning. This
will be restricted to Rs. 2.0 lakh per project in case SNA also undertakes the
project development work.
Financial Assistance for training and awareness creation
5.3
Financial assistance may be provided upto a maximum of Rs 3.00 lakh per
event for organisation of training courses, business meets, seminars,
workshops and awareness raising activities on case-to-case basis.
6.
RELEASE OF FINANCIAL ASSISTANCE
6.1
The financial assistance will be released by the Ministry in two
installments as follows:
i.
First installment of 50% of eligible subsidy to the FI (or the Lead FI)
lending for the projects for onward release to the developer as contribution
towards project equity after release of the first installment of loan;
ii.
Balance 50% of the eligible subsidy after successful commissioning of
the project as per DPR norms and operation of the project for three months,
including at least 72 hours continuous operation at a minimum of 80% of the
rated capacity.
6.2
In case of the projects set up by the developers through their own
resources, financial assistance would be released directly to the developers
after successful commissioning of the projects.
7.
MONITORING MECHANISM
7.1
The concerned State Nodal Agencies will closely monitor the execution
of the projects and provide guidance for their timely completion and submit
monthly progress reports to MNRE.
MNRE
may also monitor the progress of implementation of projects as well as their
performance through a Monitoring Committee consisting of representatives from
the MNRE, financial institution(s)/banks and State Nodal Agencies.
7.2
As regards the monitoring of performance of projects, including the
limit of utilisation of other wastes of renewable nature and biomass, MNRE may
also engage the services of independent third party entities.
8.
OTHER SUPPORT MEASURES
Research
& Development:
8.1
Financial support will be provided for R&D projects on cost sharing
basis in accordance with the R&D Policy of the MNRE.
Financial support may also be provided for projects involving Applied
R&D and Studies on resource assessment, technology up-gradation and
performance evaluation. This will
be governed by the procedures / guidelines being issued by the R&D
Division of MNRE separately.
9.
In case of any ambiguity in interpretation of provisions of this
scheme, the decision of the MNRE shall be final.
10.
Hon’ble Supreme Court held a hearing on May 6, 2005 on a Writ
Petition No. 888/1996 and ordered, inter-alia, that till the position is clear
the Government would not sanction any further subsidies for projects based on
Municipal Solid Wastes. Accordingly,
no subsidy will be sanctioned for such projects until further orders of Hon’ble
Supreme Court in this regard.
11.
This issues with the approval of competent authority and concurrence of
IFD vide their diary No. IFD/SAN/106/165/2005-06 dated 22.07.2005.
