Last updated: December 17th, 2019 3:40 PM

NABARD Loan for Warehouse and Cold Storage

In the 2014-15 Budget, NABARD was allocated a fund of Rs.5000 crores for the creation of an infrastructure relating to the storage of agricultural commodities. Consequent to the allocation, the fund has been named Warehouse Infrastructure Fund (WIF 2014-15). The fund envisages extension of loans to Public and Private sectors for construction of warehouses, silos, cold storages and other cold chain infrastructure. Further, the warehouse infrastructure fund would also be utilized for meeting the growing demand for scientific storage capacity for agricultural commodities in the entire country, especially in the Eastern, North Eastern states and food grain deficit States. In this article, we look at the procedure for obtaining NABARD Loan for Warehouse and Cold Storage.

Eligibility

The NABARD loan will be provided for proposals of projects involving creation of storage infrastructure, with a minimum aggregate capacity of 5000 metric tons (MT), for agricultural and allied produce including construction of:

• Warehouses
• Silos
• Cold storage, controlled atmosphere (CA) stores, other cold chain infrastructure activities like pack houses / integrated pack houses, reefer vans, bulk coolers, individually quick frozen units, chilling/ freezing infrastructure, etc.

Modernization or improvement of the existing storage facility will also be considered on a merit basis. The following entities are eligible to receive the NABARD Loan for Warehouse and Cold Storage:

• Corporates / Private Limited Company / Individual Entrepreneurs
• State / Central Government Owned / Assisted Entities
• Cooperative, Federations of Cooperatives, Producer Companies, Federations of Farmers’ Collectives
• Primary Agricultural Credit Societies (PACS) / Cooperative Marketing Societies (CMS) or Similar Institutions.

Further, the NABARD loan will be provided only to dry and wet storage projects which conform to the norms / standards prescribed by Warehousing Development and Regulatory Authority (WDRA) / National Centre for Cold-chain Development (NCCD). The borrower must give an undertaking for obtaining accreditation / registration from WDRA for storage infrastructure / following the standards set by NCCD for cold chain infrastructure, on completion of the infrastructure.

Warehouse or Cold Storage Loan

Private Limited Companies, Entrepreneurs and Corporates: The NABARD loan for Cold Storage and Warehouse can be sanctioned for a tenure of 7 or more years for upto 75% of total project cost. If the tenure of loan repayment is 7 years or less, then the interest rate chargeable is Prime Lending Rate of NABARD + Risk Premium. If the tenure of loan repayment is 7 years or more, then the interest rate chargeable is Prime Lending Rate of NABARD + Risk Premium + Tenor Premium.

Cooperatives (and their Federations), APMCs or Similar Institutions: The NABARD loan for Cold Storage and Warehouse can be sanctioned for a tenure of 7 or more years for upto 95% of total project cost. If the tenure of loan repayment is 7 years or less, then the interest rate chargeable is Prime Lending Rate of NABARD + Risk Premium. If the tenure of loan repayment is 7 years or more, then the interest rate chargeable is Prime Lending Rate of NABARD + Risk Premium + Tenor Premium.

Agencies Owned / Sponsored by Government of India, Producer Companies: The NABARD loan for Cold Storage and Warehouse can be sanctioned for a tenure of 7 or more years for upto 95% of total project cost. If the tenure of loan repayment is 7 years or less, then the interest rate chargeable is Prime Lending Rate of NABARD + Risk Premium. If the tenure of loan repayment is 7 years or more, then the interest rate chargeable is Prime Lending Rate of NABARD + Risk Premium + Tenor Premium.

For more information about cold storage or bank loan, please visit IndiaFilings.com and talk to a Business Advisor.