|
With a view to aggressively promote agribusiness project development in the country, the Government of India has approved a scheme with an outlay of Rs.48.00 crores to provide Venture Capital assistance to agribusiness projects and to set up a Project Development Facility to assist producer groups/organizations in preparation of economically viable detailed project reports. The scheme envisages a single-window approach for extending Venture Capital along-with bank term loan/working capital to the beneficiary. The scheme will be operated by Small Farmer’s Agribusiness Consortium (SFAC) and implemented in close association with Nationalized Banks, SBI and its subsidiaries and other commercial banks.
Venture Capital assistance will be available to projects that are dependant upon agricultural or allied produce, provide assured market to producers, encourage farmers to diversify to high value crops and are accepted by lending banks for grant of project term loan after satisfactory techno-commercial feasibility. The amount of Venture Capital that SFAC will ordinarily provide to qualifying projects shall be 10 per cent of total project cost of 26 per cent of the project equity of Rs.75 lakhs whichever is lowest. Higher Venture Capital assistance can be provided to deserving projects on merit and/or to projects that are located in remote and backward areas, North Eastern and Hilly States and projects sponsored by States/State SFACs.
The beneficiary is expected to repay back the Venture Capital in lump sum to SFAC after full repayment of the Bank’s term loan.
SFAC’s Project Development Facility (PDF) will also provide financial support to farmer’s, Producer Groups, Agripreneurs, Units in Agri-Export Zones, Organisations and Agriculture graduates in the preparation of bankable Detailed Project Reports. The beneficiary will need to obtain an in-principle recommendation from the area Lending Banks evincing their interest in funding such projects. Detailed Project Reports will be prepared by consulting firms/institutions who have established local area competences and have been empanelled by SFAC.
The cost of the proposed agribusiness project has to be above Rs.50.00 lakhs. However, projects valuing Rs.25.00 lakhs and above proposed to be located in backward, hilly and North Eastern States could also be considered for PDF and Venture Capital assistance. Central Government has allocated Rs.48.00 crores for the scheme during the years of 2005-06 and 2006-07.
UM/RC/Hb
|
