Circulars/Notifications / SME Department  

 SMEFD Circular Letter No. 07 of 2009
June 08, 2009 

The Presidents/ CEOs,
All Banks/DFIs

Dear Sirs /Madam,

Long Term Financing Facility (LTFF) for Plant & Machinery-
Eligibility of Generators / Captive Power Plants

       Please refer to MFD Circular No.04 dated June 24, 2008 on the captioned subject.

2. In order to facilitate the export oriented industries to overcome problems arising out of the prevailing electricity crises, it has been decided that financing facilities under LTFF Scheme shall also be available to export oriented units/projects which presently are not eligible under LTFF Scheme for import of generators/captive power plants (including other allied machinery items used to generate electricity) on following terms & conditions:-

i)    The capacity of generator/captive power plant shall not be in excess of their in-house energy requirements for the manufacturing of their products. In case of excess generation capacity, only the proportionate financing up to the manufacturing requirements of the unit/project will be eligible.
ii)    Refinancing shall be allowed to the extent of 50% of financing provided by banks/DFIs for import of generators/captive power plants. Remaining 50% shall be financed by the banks/DFIs from their own sources as per the terms & conditions of financing banks/DFIs agreed with the borrowers concerned.
iii)    L/Cs established since January 1, 2008 but retired/to be retired during the period from January 1, 2009 to December 31, 2009 shall be eligible for refinancing under the Scheme.
iv)    Minimum exports of the unit/project should be at least 50% of its annual sales.

3. All other instructions on the subject shall remain same.


Yours faithfully,

(Mansoor H. Siddiqui)

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