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Equity Contribution Requirement• Renewable Energy The minimum equity contribution required from project promoters is 5% of the total project cost (2% in cash and 3% in kind). • Non Renewable Energy The minimum equity contribution required from project promoters is 15% of the total project cost (8% in cash & 7% in kind) Grace Period• Up to 6 months for thermal stations and ranging between one and three years for other types of projects like hydro, wind and Solar • The exact number of grace period to be determined per recommendation of the project appraisal Loan repayment period• This is determined based on the cash flow and economic life of the investment. The maximum permissible period for which the loan is available should be ten years including grace period. • Loan repayment could be set, depending on the revenue generation capacity of the project, monthly, quarterly, biannually or annually Collateral• For non-movable electric generating stations The collateral pledged, for non-movable electric generating projects is the project itself • For movable electric generating stations For projects that prove to be viable and where the project promoters is willing to contribute in cash 5% of the project fund up-front and where the transfer of the project including the land on which the project is located is guaranteed by the regional low, collateral equivalent to the loan component (minimum of 95% of the project cost) can be acceptable. DBE and REES may require additional collateral from among the following: • Bank and Insurance guarantee or • Regional government guarantee • Urban (municipal area) registered property or • Well-known (business person) third party written guarantee etc Interest rate• The interest rate is 7.5% • Rural Electrification Fund projects will not be required to pay Service and Commitment charges. |