FINANCINGNORMSANDSCHEMES Contents

S. No.
1. 2. 3. 4. 5. 6. 7. 8. 9. TYPESOFSCHEMES GENERALELIGIBILITYCONDITIONS MINIMUMLOANAMOUNT FINANCING NORMS RELATING TO MAXIMUM MORATORIUM REPAYMENTPERIODANDMINIMUMPROMOTERCONTRIBUTION

CONTENTS

PAGENo.
2 3 45 6 7 8 911 12 1314 15 1617 A1A15 19

SECTORSELIGIBLEFORASSISTANCE

GOVERNINGAPPLICABILITYOFRATEOFINTEREST

SPECIALEFFORTS & CONCESSIONS RELATING TO BACKWARD/ RURALAREAS,SC/ST,WOMENENTREPRENEURS,etc. REBATESININTERESTRATE POLICYONPREPAYMENT

10. CHARGESFORLIQUIDATEDDAMAGES 11. SCHEDULEOFFEES: 12. 13. a. PROCESSINGFEE b. FRONTENDFEE c. RESCHEDULEMENTFEE d. FEEFORNOC/SHARINGOFAPPRAISAL e. FEEFORISSUINGOFCOMFORTLETTER f. FEE FOR ISSUING OF NOC FOR MERGER/ AMALGAMATION/ FOREIGNPARTICIPATIONETC. ANNEXUREA AMENDMENTSHEET

1. SECTORSELIGIBLEFORASSISTANCE: a) SmallHydroPower b) Medium&LargeHydroProjectsabove25MW c) WindEnergy d) BioEnergy e) SolarEnergy f) EnergyEfficiency&EnergyConservation g) Biofuel/AlternateFuel h) New&EmergingTechnologies i) DevelopmentalActivities/NewInitiatives

2. TYPESOFSCHEMES: i. ProjectFinancing ii. EquipmentFinancing iii. LoansforManufacturing iv. FinancialIntermediaries v. FinancingofcommissionedprojectsincludingtakeoverofLoansfromother Banks/FIs. vi. Additional/BridgeLoanagainstSDFLoan vii. LoanagainstSecuritization viii. BusinessdevelopmentAssociates

3. GENERALELIGIBILITYCONDITIONS: Alltypesofapplicants,whohaveborrowingpowersandpowerstotakeupnewand renewable energy and energy efficiency projects as per their Charter, are eligible to availfinancialassistancefromIREDAexceptthefollowing: (i) Trusts /Societies shall be considered for financing only against Bank Guarantee from Scheduled Commercial Banks / Pledge of FDR issued by ScheduledCommercialBanksasdescribedinRBIAct,isprovided. (ii) Individuals, Proprietary concerns and Partnershipfirms (other than limited liability partnerships (LLP)) unless security of Bank Guarantee from ScheduledCommercial Banks/ Pledge of FDR issued by Scheduled CommercialBanksasdescribedinRBIAct,isprovided (iii) Applicants with accumulated losses (without taking in to account effect of revaluation of assets , if any ) as per audited Annual Accounts of the immediate preceding financial year unless security of Bank Guarantee from Scheduled Commercial Bank / Pledge of Fixed Deposit Receipt (FDR) issued byScheduledCommercialBankasdescribedinRBIActisprovided. (iv) Loss making applicants as per Audited Annual Accounts of the immediate last year of operation unless security of Bank Guarantee from Scheduled Bank/PledgeofFDRissuedbyScheduledBanks Theprovisionsunder(iii)and(iv)aboveshallnotapplytothelossincurred duetopreliminary&preoperativeexpensesinthecaseofprojectspromoted by Special Purpose Vehicle (SPV) and also the loss due to depreciation in the caseoftakeoverloans,andincaseof: (a) companies posting loss due to demerger /merger/ acquisition /amalgamation (b) loss due to booking of one time expenditure provided they are other wiseprofitmaking. (v) (vi)

Applicants who are in default in payment of dues to FinancialInstitutions, Banks,NBFCsand/orIREDA. Applicants/ Group Companies and/or main promoters of the applicant company which are in default in payment of IREDA dues at the time of submissionofapplication.

(vii)

Applicants/ Group Companies and / or main promoters of the applicant company classified as willful defaulters as defined by RBI/ classified by otherFIs.

(viii) Projectsinvolvingsecondhandequipmentandmachinery. (ix) Applicants / Group Companies and / or main promoters of the applicant companywhohadavailedOTSfromIREDA. (x) ApplicantsregisteredoutsideIndia. (xi) Applicants/ Group Companies and/or main promoters of the applicant Company convicted by court for criminal/ economic offences or under nationalsecuritylaws.

4. MINIMUMLOANAMOUNT: The minimum loan eligibility from IREDA will be Rs. 50 Lakhs unless specifically exemptedunderanyscheme/programme.

5. FINANCING NORMS RELATING TO MAXIMUM MORATORIUM, REPAYMENT PERIODANDMINIMUMPROMOTERCONTRIBUTION: The financing norms relating to maximum moratorium, repayment period and minimum promoter contribution, in brief, for different type of eligible projects are indicatedintheAnnexureA.

6. GOVERNINGAPPLICABILITYOFRATEOFINTEREST The rate of interest prevailing at the time of each disbursement shall be applicable corresponding to the rated grade at the time of sanction. The interest rate at present is subject to reset on commissioning of the project or two years from the date offirst disbursement which everisearlier and thereafterevery2 years. Incase of projects commissioned prior to first disbursement, the first reset will be after 2 yearsafterfirstdisbursement. For projects of waste to energy & other non grid connected projects / schemes not covered by CRRS rating, interest rates prevailing at the time of each disbursementshallapply. Projects sanctioned prior to 31, March 2008 which are having reset clause in their loanagreement,shallbeeligibleforratingbyCRRSatthetimeoffirstresetandthe applicable rate of interest as per rating will be charged. This will be applicable to those projects whose interest rates have already been reset under this category. The rate of interest Corresponding to the rating assigned by IREDA shall be applicable from the date of reset subject to the condition that the borrower shall provide all relevant information / documents required for rating within a maximumperiodoftwomonthsfromtheapplicabledateofreset,failingwhichthe applicationratecorrespondingtoGradeIV. Resetperiodsaresubjecttochange.

7. SPECIALEFFORTS & CONCESSIONSRELATING TO BACKWARD/ RURAL AREAS,SC/ST,WOMENENTREPRENEURS,etc. Dueencouragementandeffortsaremadetoassistpromotersinthebackward/rural areas and falling in SC/ST, Women, ExServicemen and Handicapped categories. Thedetailsareasfollows: A) Entrepreneurs belonging to SC/ST, Women, ExServicemen and Handicapped Categories (applicable only for projects involving project costuptoRs.75lakhs) I) Rebateof0.5%p.a.ininterestrate II) Exemptionfrompaymentof: a) ProcessingFee b) Inspectioncharges. c) ExpenditureonNomineeDirectors. d) FrontEndFee III) Concessionof5%inpromoterscontribution. Notes: ThedefinitionofSC/ST,Women,ExServicemenandHandicappedEntrepreneurs wouldbeasunder: (1) For Companies incorporated under Companies Act and Cooperative SocietiesAct: a)More than 50% of equity share holding/share capital should be with SC/ST/women/ ExServicemen and Handicapped entrepreneurs singly or jointly;and b)EnterprisetobemanagedbySC/ST/Women/ExServicemen/Handicapped i.e. management vests with the SC/ST/Women/ExServicemen/ Handicapped in the form of majority in the Board of Directors/Governing Body. (2)ForSocietiesandNGOs. Majority of members are SC/ST/women/exservicemen/handicapped. Management vests with the SC/ ST/ Women/ Exservicemen/ Handicapped intheformofmajorityintheGoverningBody/Council/Board.

B)

Entrepreneurs setting up Projects in North Eastern States and Sikkim, Uttaranchal,Jharkhand&Chhattisgarh I. GridConnectedProjects (i)Rebateof0.5%p.aininterestrate (ii) 50%Exemptionfrompaymentof: (a) ProcessingFee (b) InspectionCharges (c) LegalCharges(otherthanincurredforRecovery) (d) ExpenditureincurredonNomineeDirector(s) (e) Frontendfee II. NonGridProjects (i) (ii) Rebateof1.0%p.aininterestrate 50%Exemptionfrompaymentof: (a) ProcessingFee (b) InspectionCharges (c) LegalCharges(otherthanincurredforRecovery) (d) ExpenditureincurredonNomineeDirector(s) (e) Frontendfee

Notes:

(i) In case the entrepreneurs also belong to SC/ST/Women/Ex Servicemen/Handicapped category, additional concession, if any, available forthiscategorywillalsobeavailable. (ii) The interest for Infrastructure loan under BDA scheme for North Eastern RegionandSikkimwouldbeZero%.

C) Entrepreneurs setting up Projects (Grid connected or Nongrid connected) inIslands,Estuaries,Jammu&Kashmir: (i) Rebateof0.5%p.aininterestrate (ii) 50%Exemptionfrompaymentof:

(a) (b) (c) (d) (e)

ProcessingFee InspectionCharges LegalCharges(otherthanincurredforRecovery) ExpenditureincurredonNomineeDirector(s) Frontendfee

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Notes: (i) In case the entrepreneurs also belongs to SC/ST/ Women/ ExServicemen/ Handicapped category, additional concession, if any, available for this categorywillalsobeavailable. (ii) The definition of Islands, Estuaries would be as notified/ announced/declared by way of Gazette/Government Order/Circular/Executive Order/Specific clarification letter by Competent Authorities of Central/State Government/Local Authorities in the prescribed formofIREDA. All interest concessions/rebates will be available on the condition that the Borrowerpaystheinstallmentsofloanandinterestonorbeforeduedates.Thiswill notapplytorebateforprovidingBankGuarantee.

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8. REBATESININTERESTRATE: (a) Projects not covered under CRRS, would be eligible for rebate as applicable in theeventofBorrowerfurnishingsecurityofBankGuarantee,equivalenttothe amount disbursed by IREDA, from scheduled banks as described in RBI Act. or Unconditional or Irrevocable guarantee from All India Public Financial Institutions with AAA or equivalent rating or pledge of FDRs issued by Scheduled Banks. For rated projects, the interest rated charged will be as applicable for Grade I borrowers. The lending rate to any project shall not be less than the minimum base rate ( to be effective from the date of applicability of CRRS) under any circumstances including special concessions and rebates extended under IREDAs general financing guidelines (other than the pass throughinterestsubsidy,ifany). Exclusions (i) BG/ FDR provided against debt service reserve money (DSRM) as per requirementofTrust&RetentionAccount(TRA) (ii) BG / FDR provided towards collateral security/ Loan against promoters contribution. (b)SpecialrebatetoWindGBIProjects: Rebate at 0.25% for a period of 2 years starting from the first date of disbursement projects which are eligible for generation based incentive (GBI), subjecttotimelypaymentofthedues.

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9.POLICYONPREPAYMENT: IREDA has a policy for prepayment of the loan/ conversion of Interest to Present Lending Rate. Prepayment of loan in full/part is permissible subject to prior written notice of minimum 30 days and payment of the prepayment premium by theborrower.Incaseaborrowerproposestocontinuetoavailtheloanfacilityfrom IREDA but desires that the documented Interest rate be converted into the Present Lending Rate applicable to a particular sector, the same shall also be considered by IREDA subject to Prepayment Premium. The basis of calculating the prepayment premiumshallbeasunder: (A) IFABORROWERPRECLOSESTHELOAN: Whentheinterestrateisnotresetduringtheloanperiod; i. Thestreamofcashflowsfortheprepaymentperiodhastobeworkedoutbased onthedocumentrateandcurrentlendingrateforthesector,fortheperiod. ii. The differential Interest (disbursement rate less the current lending rate applicable to the borrower) cash flows are discounted on daily basis by taking theprevailingPresentLendingRateasdiscountfactor. iii. ThePrepaymentPremiumascalculatedin(ii)above,shallbechargedsubjectto minimumpremiumamountof2%oftheloanoutstanding. Exclusion: i. The above shall not be applicable in case the loan is preclosed partly/ fully out ofcapitalsubsidy/grant. ii. The above is not applicable in respect of projects where the loan agreement providesforspecificprepaymentconditions. (B) IN CASE THE BORROWER CONTINUES LOAN WITH REDUCED RATE OF INTERESTi.eCURRENTLENDINGRATEFORSECTOR: i. Tochargepremiumascalculatedat(A)(i)and(ii)aboveandreducethelending ratetocurrentrate. ii. 50% of the Premium as calculated in (i) above shall be charged subject to compliance of conditions stipulated in the Interest Subsidy sanctioned by MinistryofNewandRenewableEnergy,ifany. iii. Theconversionofrateofinteresttopresentlendingratemaybepermittedmore numberoftimesduringthetenureoftheloansubjecttocomplianceofcondition in(B)(ii)above.

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(C) IF A BORROWER PRECLOSES THE LOAN AFTER AVAILING OF THE FACILITY OFCONVERSIONOFINTERESTTOPRESENTLENDINGRATE. Incasetheborroweroptstopreclosetheloan,atanytime,infuture,afteravailing reduction in interest rate as above, it has to pay premium being the difference between the original documented rate and the present lending rate at the time of preclosure (the premium payable shall be as per para A above). The premium paid, as indicated in para B (ii) above shall, however, be adjusted out of the premiumsoworkedout. (D)PARTIALPREPAYMENT: If a borrower makes any partial prepayment of loan during the pendancy of the loanperiodoverandabovethenormalrepaymentoftheinstallment,thesaidpre paymentshallnotattractanyprepaymentchargessubjectto: a) Not more than 10% of the loan outstanding in one financial year shall be allowedtobepartiallyclosed. b) Thesaidpartialprepaymentshouldbemadeoutofinternalaccruals/surplus revenue of funds from the project only. The borrower shall satisfy IREDA withdocumentaryevidenceinthisregard. c) Over and above 10% if a borrower opts to preclose the balance loan outstanding in one lump sum at any point of time subsequent to the partial prepayment, it shall be liable to pay the prepayment premium in the same mannerasindicatedinParaAandParaBabove.

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10 CHARGESFORLIQUIDATEDDAMAGES: Default in punctual payment of interest will involve compound interest at the samerateasontheprincipalloanamount. In case of default in payment of installments of principal, interest and all other monies (except liquidated damages) on due dates, liquidated damages, at the rate of 2.50% p.a. over and above the applicable rate of interest for the projects shallbepayable. The additional interest by way of liquidated damages for nonpayment of interest and repayment of principal is calculated on daily basis. The number of daysinayearbeingcalculatedas365. (Applicability:toallexistingandfutureprojects21.2.2008onwards)

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11. SCHEDULE OF FEES (a) PROCESSING FEE :

Loan applied Up to Rs.1 Cr. Registration Fee per application Rs.10,000/- plus service tax & education cess, as applicable

Above Rs.1 Cr. & upto Rs. 20 Rs. 30,000/- plus service tax & education cess, as applicable Cr. Above Rs.20 Cr. And upto Rs. 50,000/- plus service tax & education cess, as applicable Rs.40 Cr. Above Rs. 40 Cr. Rs. 60,000/- plus service tax & education cess, as applicable

(b) FRONT END FEE STRUCTURE The borrowers will have to pay front-end fee as below :
S.No. Particular 1 2 For loan upto Rs. 5.00 Cr. For Loan above 5Cr. Proposed Front End Fee 0.50% of loan amount For loan above Rs.5 Cr. and upto Rs. 100 Cr. : 1% of the loan amount. For loans above Rs. 100 Cr. : 1% of First Rs. 100 Cr. plus 0.25% for the balance loan amount above Rs. 100 Cr.

Notes : 20% rebate in front end fee shall be applicable if paid within 60 days from the date of IREDA sanction letter. Applicable fee for take over loans 50% of front end fee, as applicable. In case of State Nodal Agencies, the rate of frontendfee will be 0.5% irrespective of loan slab. This amount will have to be paid on sanction before signing of the Loan Agreement or as stipulated and is nonrefundable. The amount of frontend fee can be included as a part of the project cost and is to ensure borrowers commitment to utilize the funds and execute the project sanctioned. Additional loan, if sanctioned will also be governed by above table with reference to total loan amount, but front end fee shall be chargeable on the additional loan component.

APPLICABILITY : The proposed Front End Fee Structure shall be applicable for all sanctioned projects henceforth and also for the projects where front-end fee is not paid and loan agreement yet to be signed. 16 -

(C)RESCHEDULEMENTFEE: IREDA normally does not allow rescheduling of installment(s) of loan as incorporatedintheLoanAgreement. The application for reschedulement /restructuring shall accompany with applicationfeeofRs.25,000/plusservicetax,educationalcess,etc. (d)FEEFORNOC/SHARINGOFAPPRAISAL: IREDA would charge fee of 1 % of outstanding loan or Rs. 25,000/ whichever is lower plus service tax & education cess as applicable for issuing NOC and Rs.1,00,000/ plus service tax & education cess as applicable, for sharing Appraisal Report per request. The sharing of Appraisal Report will take place if the project envisaged cofinancing arrangements and/or requirement of working capital at the timeofappraisalofprojectbyIREDA. (e)FEEFORISSUINGOFCOMFORTLETTER: IREDAwouldcharge1%ofamountofcomfortletterforissuingofcomfortletter. (F) FEE FOR ISSUING OF NOC for MERGER/ AMALGAMATION/FOREIGN PARTICIPATIONETC: IREDA would charge fee of Rs. 1, 00,000/ NOC for merger/amalgamation/foreign participationetc.,

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Amendment/ Revision in the Financing Norms & Guidelines

S.No. Date of Amendment/ Revision 1. 22.07.2010

Clause Ref. Notes under Biomass Power of Annexure - A Annexure - A Clause No. 11 Schedule of Fees

Page No. 16 of Annexure - A

Summary of changes Clarification on Item No. 5 of Notes on Biomass Power Generation.

2. 3.

27.07.2010 25.02.2011

All pages of New Interest rates effective Annexure - A from 27.07.2010 16 of Revision of Front-end-fee. Financing Norms & Schemes

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