IREDA Scheme for Discounting of Energy Bills
The Ministry of Commerce and Industry in association with Indian Renewable Energy Development Agency Limited (IREDA) has developed the scheme for discounting of energy bills. Under this scheme, all IREDA borrowers who are selling energy to the state will be provided with maximum bill discounting facility of Rs.20 crores against the invoice. In this article, we look at the IREDA Scheme for Discounting of Energy Bills in detail. Also, read about IREDA NCEF Refinance SchemeOverview of the Scheme
The renewable project's developers exporting energy to the State utilities will raise invoice against the number of units exported on a monthly basis. The utilities are likely to make payment against the billed amount within the stipulated time. However, it is noted that there has been a delay in receipt of payment against energy bills which impacts the debt obligation of the borrowers. In view of this, it is proposed to provide bill discounting facility for the energy bills of borrowers which are pending for payment with utilities for up to 6 months.Eligibility Criteria
The following are the eligibility criteria to be satisfied to avail the benefits under the scheme:- The applicant must be the existing borrower of IREDA (sole, co-financing, consortium financing).
- The borrowers should not be declared as Non-Performing Assets (NPA) by any of the lenders.
Scale of Assistance
The assistance to the extent of 75% of the invoice value pending for a maximum of six months from the date of application, which is limited to the maximum amount of Rs.20 crores will be provided. Note: The minimum amount of transaction covered in the bill should be of Rs.1 crore or above but not less than Rs.1 crore.Repayment Period
The repayment period for the borrower will be for one year from the disbursement date. The promoter or borrower needs to repay the amount from their own sources in case the same is not realised from the utilities within the specified date.Interest Rate
The rate of interest fixed under the IREDA Scheme for Discounting of Energy Bills will be high by 50 basis point. Also, in case of changes will be notified from time to time by the interest rate fixing committee.Security
The securities required under the IREDA Scheme for Discounting of Energy Bills are listed below:- No Objection Certificate (NOC) will be collected from the co-lenders in case of co-financed projects.
- Post Dated Cheques (PDC) for the amount of respective bills being discounted is required.
- Personal or Corporate guarantees will be obtained.
Documents Required
The bellow following are the documents to be submitted while applying for the energy bill discounting scheme:- Copy of bill discounting agreement
- Copy of bill of exchange
- Endorsement of bills being discounted by the borrower
- Any other document, as and when required.
Application Procedure
To avail the benefits under the bill discounting scheme, the applicant has to follow the below steps:- The applicant needs to approach the Indian Renewable Energy Development Agency (IREDA) with the bills to be discounted.
- Also, the applicant has to submit the No Objection Certificate (NOC) from the co-lenders in case of consortium or co-financing projects which will specify that the proceeds to be received from utilities against the discounted bills will be used on priority basis towards clearance of IREDA outstanding due.
- Therefore, the balance amount will be appropriated as per existing Trust and Retention Account (TRA) mechanism.
- Then the applicant is required to provide an original acknowledgement of the receipt of bills to be discounted by the respective utilities.
- Now, submit an undertaking that the bills submitted for discounting are not under any dispute and eligible for receipt of payment from utilities.
- Also, the borrower needs to undertake that the proceeds from the discounted bills will be credited in the respective trust and retention account towards loan against bills discounted on a priority basis.
- Finally, the Indian Renewable Energy Development Agency (IREDA) will discount the bills and lend the eligible amount to the borrowers.
- The discounted amount will be utilised for clearance of lenders dues. The dues of lenders will be cleared on a pro-rata basis.
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