New Delhi [India], May 11 (ANI): Government-run oil marketing companies - Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) - have entered into a long-term purchase agreement for upcoming dedicated ethanol plants across India, the Ministry of Petroleum & Natural Gas said on Wednesday.
The first set of Tripartite-cum-Escrow Agreement (TPA) was signed among oil marketing companies (OMCs), project proponents and banks of the respective ethanol plant projects in presence of Sandeep Poundrik, Principal Secretary, Department of Industries, Government of Bihar, Ashwani Bhatia, MD, State Bank of India and Sukhmal Jain, Executive Director I/C, Marketing Corporate, BPCL.
State Bank of India, Indian Overseas Bank and Indian Bank are three banks who are involved in this tripartite agreement with OMCs and project proponents. The agreement is designed to ensure that payment received by Ethanol plants is utilised 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 of India's Ethanol Blended Petrol (EBP) programme.
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 Micromax Biofuels Pvt Ltd, Bihar, Eastern India Biofuels Pvt Ltd, Bihar, Muzaffarpur Biofuels Pvt Ltd, Bihar, K P Biofuels Pvt. Ltd, Madhya Pradesh and Visag Biofuels Private Limited, Madhya Pradesh.
In Ethanol Supply Year 2021-22, India achieved 9.90 per cent ethanol blending, consuming 186 crore litre of ethanol, saving over Rs 9,000 crore of foreign exchange.
The Government has advanced the target of achieving 20 per cent 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 litre of ethanol to achieve the target in 2025-26. But, there is a deficit of approximately 650 crore of ethanol as per the current availability. These five projects are likely to contribute to around 23 crore litres of ethanol per annum, the ministry said.
"Ethanol blended petrol not only give us cleaner environment as it produces 38 per cent lesser carbon dioxide emission, as well as, support rural economy with investment in rural areas and employment generation," it added. (ANI)