ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE :: KADAPA. Circular No BC-CD Date:

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1 ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE :: KADAPA Circular No BC-CD Date: REVISED CAPITAL SUBSIDY SCHEME FOR SOLAR LIGHTING AND SMALL CAPACITY PV SYSTEMS UNDER JAWAHARLAL NEHRU NATIONAL SOLAR MISSION Circular No BC-CD Dt Circular No BC-CD Date: Circular No BC CD Date: Attention of Branches and Regional Offices is invited to the above circular, wherein detailed guidelines on Capital Subsidy-cum-Refinance Scheme for installation of Solar Off Grid and Decentralized application and Solar Water Heating Systems under JNNSM of the Ministry of New and Renewable Energy (MNRE) have been communicated. Now, the NABARD, Central Office, Mumbai, vide their Circular No 54/ICD-GSS/5A/2012 dt has informed that the said scheme was closed as on and communicated revised Capital Subsidy Scheme for Solar Lighting and Small Capacity PV Systems under JNNSM which will be effective from 15 th March In the revised scheme, the subsidy component has been raised to 40% of the approved unit cost. Based on the revised scheme forwarded by NABARD, guidelines are framed for implementation by the Bank and placed before the Board. The Board of Directors in the meeting held on have approved the same and permitted the Bank to implement the Scheme. The revised guidelines are furnished in Annexure-I. All the branches/regional Offices are advised to take note of the revised guidelines and promote the Solar Home Lighting Systems in their area operation in a big way. Regional Offices are advised to guide the branches in implementation of the Scheme and also give wide publicity by arranging demos through the suppliers. Clarifications required, if any, on this circular may be sought from Credit Department, Head Office, Kadapa. (K. PREETAM LAL) CHAIRMAN Page 1 of 11

2 ANNEXURE-1 GUIDELINES FOR CAPITAL SUBSIDY SCHEME FOR SOLAR LIGHTING SYSTEMS AND SMALL CAPACITY PV SYSTEMS UNDER JAWAHARLAL NEHRU NATIONAL SOLAR MISSION - REVISED GUIDELINES 1. Implementation Period The modified scheme will be effective from 15 th March Loans sanctioned from 15 th March, 2012 shall be covered under the scheme. The earlier scheme of Capital subsidy cum refinance scheme will be closed on 12 th March Unit Cost 2.1 Only models approved by MNRE will be eligible for coverage under the scheme. The models approved by MNRE are indicated in Annexure I. Presently the bench mark cost for SPV system is Rs 270/- per W.P. Branches can finance only units conforming the conditions/stipulations laid down in the model projects and more specifically under the Special Terms and Conditions and declaration (Annexure II & III) without seeking prior approval from MNRE. 2.2 In case units are financed with cost over and above the approved unit cost, capital subsidy will be limited to the maximum capital subsidy ceiling as indicated in these models (i.e, not more than 40% of the total financial outlay). In such cases, the additional cost would have to be borne by the beneficiary. However, in cases where the actual cost is less than the indicative cost of the approved models, the eligible capital subsidy will be 40% of actual cost of the project. Purchase of systems manufactured by companies not approved/listed by MNRE will require prior approval by MNRE. For list of manufacturers, branches/regional Offices may visit the website of MNRE Eligible Borrowers: Individuals, group of individuals, SHGs, JLGs, NGO, Farmers Clubs etc. will be eligible for subsidy. However, private/public limited companies/corporate will not be eligible. 3. Classification: Priority Sector Advance - Medium Term - Non Farm Sector 4. Location of the unit : The unit could be located both in urban and rural areas. 5. Pattern of Assistance 5.1 The pattern of assistance will be as under: Party s Margin - 10% Subsidy - 40% of the approved unit cost (bench mark cost) Bank Loan - 50% 5.2 The above subsidy pattern will be the same for all categories of borrowers (SC/ST, women, small farmers, physically handicapped, etc.) irrespective of the location of the unit. Page 2 of 11

3 6. Interest Rate and Lock in period of Bank Loan: The loans extended under the scheme would carry an interest rate of 11% per annum subject to change from time to time and would be extended with a repayment period not exceeding 5 years. The loan repayment period would have a minimum lock in period of 3 years from the date of disbursement of the first installment of the loan. No interest shall, however, be charged by the branches on the capital subsidy component. If the loan is repaid before three years, the borrowers will not be eligible for subsidy. No overdue interest shall be charged on loans upto Rs.25000/-. Overdue interest of 2.25% over the applicable interest rate should be charged on overdue amount of loans over and above Rs.25000/-. 7. Security a) Loans ( including subsidy) upto & inclusive of Rs.30000/- *: Hypothecation of assets created out of Bank loan * If the party is already having loans like PKCC, Flexi Trade loan etc., loans upto 30,000/- under this scheme can be extended without collateral security. However, if the existing loans are already covered by mortgage of immovable property, this loan should also be covered by the existing mortgage by creating additional mortgage limit. b) Loans ( including subsidy) above Rs.30000/- : i) Hypothecation of assets created out of Bank loan. ii) Collateral securities like LIC policies, NSCs, Deposits, immovable properties etc., whose worth/value is equivalent to the loan amount. 8.Surety/Guarantor : A credit worthy person shall join as surety/guarantor 9.Processing Charges : As applicable to Priority Sector Advances 10. Inspection Charges: As applicable to Priority Sector Advances 11. Release of Loan: Loan amount (including subsidy) and party s margin should be released directly to the suppliers through DD/Pay Order/NEFT after installation of the unit. 12. Repayment Schedule The loan amount shall be repayable in suitable instalments not exceeding 5 years. The Branches shall fix the repayment schedule of the loan having regard to the household cash flow of the borrowers and the life of the assets so as to ensure full repayment of the loan along with interest thereon within five years. 13. Sanctioning Powers Branch Managers Scale-I to IV - Rs.30, 000/- (including subsidy) Regional Managers: - Above Rs.30, 000/- Page 3 of 11

4 All loan proposals relating to Staff members shall be forwarded to Regional Office/branch in case headed by Chief Manager as per HO Cir No dt , for sanction. 14. Credit Limits: Credit limits shall be obtained from the respective Regional Offices. 15. Insurance The units shall be insured with bank interest clause for the total cost of the unit against Fire, Strikes, Riot, Earthquake, Storm, Tempest, Flood, Air Craft Damage etc., and Burglary before releasing the final instalment. Insurance premium shall be borne by the borrowers and insurance cover shall be kept in force by renewals during the currency of loan. 16. Release of subsidy The eligible borrowers shall apply to the banks for sanction of the project. The branch shall appraise the project as per the norms and if found eligible, sanction the loan excluding the margin subject to technical feasibility and financial viability. Based on the field visit and after satisfactory installation of the unit, the branch shall arrange to make payment directly to the supplier. After sanction of the loan including subsidy, the branch shall apply for capital subsidy in the specified format (annexure-iv). As in the case of other Govt., Sponsored Scheme, the subsidy would be credited to the SRF account of the borrower. No interest shall be charged by the Branch on the subsidy component. Subsidy will be back ended with a minimum lock in period of 3 years. If the loan is repaid before 3 years, the borrower will not be eligible for subsidy Misutilisation of subsidy and loan In case the unit is found to be incomplete or the subsidy is misutilised, the Branch shall arrange to recall the subsidy and loan amount and refund the subsidy amount to NABARD as soon as it is recovered. In the event of loan becoming NPA, the beneficiary will not be eligible for subsidy and the same will have to be refunded. 17. Refinance: Loans disbursed under the scheme will be eligible for refinance as per the refinance policy of NABARD. 18. Utilisation Certificate Branches have to submit the utilisation certificates for capital subsidy for each individual loan in the specified format indicated in Annexure V to the Regional Office. The Regional Offices have to submit the utilization certificate duly countersigned by the Regional Manager to Credit Dept, Head Office, Kadapa within 1 month from the date of disbursement. Head Office shall forward the utilization certificate to NABARD within 3 months from the date of disbursement. 19. Documentation: Usual DL application (AF-48) shall be obtained. General loan agreement (ADN-10) and stamped receipt (ADN-4) should be obtained from the borrower/s and surety/ies and ADN-11 (Guarantor Agreement) should be obtained from guarantor/s if there is no provision for the signatures of the surety/ies in ADN-10 Page 4 of 11

5 20. Other terms and conditions: a) Branches shall identify the customers who are having sufficient source of income to repay the loan. b) Loan shall be sanctioned on the basis of quotation/indicative costs and after sanctioning of the loan, the suppler company shall be advised to install the units. c) A suitable acknowledgement from the borrower shall be obtained in token of installation of the system satisfactorily. The original invoice, delivery note and stamped receipts shall be collected and kept with the branch file and the guarantee / warranty cards shall be delivered to the borrower keeping the copies in the party file. 21. Monitoring A State Level Monitoring Committee will be constituted by NABARD for smooth implementation of the scheme. Apart from CGM, NABARD and officials from the nodal agency of MNRE, the committee will also Convener, SLBC. NABARD Regional Office would convene the meeting under the chairmanship of Officer in charge and Chairman of 2-3 RRBs. The Committee, besides other issues would also look in to issues like actual cost to the end user and strategy for coverage of the most needy and poor. At national level, the programme will be reviewed by a committee consisting of Secretary, MNRE, Executive Director, NABARD and Executive Director of a Commercial Bank (on rotation). The address of the state nodal agency is furnished hereunder. Vice Chairman & Managing Director Non-Conventional Energy Development Corporation of Andhra Pradesh (NEDCAP) Ltd /2 Pisgah Complex, Nampally, Hyderabad Tel: (O), Fax: , nedcap@ap.nic.in Page 5 of 11

6 ANNEXURE I Technical and Financial parameters of pre-approved Models to be financed Model Photovoltaic modules/ panels (Wp) Battery capacity Maximum recommended load and duty cycle Bench Mark Cost (Rs.) Max. capital subsidy eligible (Rs.) Rs108/- per watt of module capacity I V, 7 AH (SMF) 5-7 watt load for 3 to 4 hrs (20 watt II V, 20 AH 10 watt load (40 watt III V, 40 AH IV V, 60 AH 20 watt load (80 watt 30 watt load (120 watt V V, 80 AH 45 watt load (180 watt VI V, 120 AH VII V, 150 AH VIII V,75/80 AH 60 watt load (240 watt 75 watt load (300 watt 90 watt load (360 watt IX V, 100/120 AH 120 watt load (480 watt Page 6 of 11

7 ANNEXURE II Special Terms and Conditions 1. The models could be home lighting systems or inverter based systems capable of handling general AC loads. 2. Manufacturers to provide Compact Fluorescent lamps (CFLs) of 9 W/11 W and LED (Light Emitting Diode) for home lighting systems. 3. The battery will be lead-acid of flooded electrolyte type, positive tubular plate or gel type Valve Regulated Led Acid and low maintenance. 4. Inverter should be of quasi sine wave/sine wave type. 5. PV module (s) shall contain crystalline silicon solar cells. 6. PV modules must be warranted for their output peak watt capacity, which should not be less than 90% at the end of 10 years and 80% at the end of 25 years. 7. The balance of systems provided must be warranted against any manufacturing/ design/ installation defects for a minimum period of 5 years. 8. The manufacturer has to give an undertaking with the invoice (Annexure III) that the system offered meets the Technical requirements/ standards contained in ANNEXURE-3 of the MNRE guidelines Ref. 5/23/2009 P&C Dated: on off grid SPV power plant systems under National Solar Mission. --- Page 7 of 11

8 ANNEXURE III (On the letterhead of the Agency/ System provider) PROFORMA FOR DECLARATION BY THE AGENCY SUPPLYING THE OFF-GRID SOLAR APPLICATION SYSTEM It is certified that I/we have read the guidelines issued by the Ministry vide 5/23/2009/P&C dated 16th June, 2010 and the related provisions/terms and conditions for availing financial support from the Ministry of New and Renewable Energy and I/we agree to abide by these guidelines and related terms and conditions. I/we confirm that the proposed solar PV system(s) for which subsidy is being claimed have not been installed/supplied earlier. A detailed site survey has been done/or will be undertaken to identify the beneficiary before actual supply and installation takes place. This is to certify that the various components of the SPV systems will conform to the Relevant Standards, as mentioned in the Guidelines for Off-grid and Decentralized Solar Applications for SPV modules and components under JNNSM. Copies of the Relevant IEC/ BIS Certificates are enclosed. We have complied with the terms and conditions stipulated by the financing bank / NABARD / MNRE under the scheme. We agree to furnish additional information, if any, required by the bank, NABARD / MNRE as and when requested. Signature Name & Designation of Authorized Signatory Address of the Agency/System provider Seal Place: Date: --- Page 8 of 11

9 CLAIM FOR CAPITAL SUBSIDY FOR SOLAR LIGHTING AND SMALL CAPACITY PV SYSTEMS OF JAWAHARLAL NEHRU NATIONAL SOLAR MISSION (TO BE SUBMITTED BY THE BRANCHES TO HEAD OFFICE THROUGH REGIONAL OFFICE) Annexure IV 1. Name of the Bank : ANDHRA PRAGATHI GRAMEENA BANK Branch: Region: 2. District: 3. State : ANDHRA PRADESH 4. Period of sanction of Bank loan : From : To : For use by NABARD RO Sr. 1 Individuals 2 Groups Of 1 Category of individuals 1a - SC 1b - ST 1c - OBC 1d - Minority Communities 1 e - Physically Handicapped Of No. of Females (out of the total) Pre approved Models 3 Total cost (Rs.) 4 Capital Subsidy eligible (Rs.) 5 Loan Amount excluding capital subsidy (Rs.) 6 Margin Money (Rs.) Certified that: 1. The project(s) has/have been appraised and found to be technically feasible and financially viable 2. All the terms and conditions stipulated under the scheme by MNRE and NABARD complied. 3. We have not applied earlier for capital subsidy covered under this claim. Page 9 of 11 Date of receipt : Signature : P V M O D L E S Total No. I II III IV V VI VII VIII IX of units A M O U N T Contd

10 4. We agree to release the subsidy amount on receipt of the same from NABARD, to the supplier directly only after a spot visit and finding that the installation is functioning satisfactorily. 5. We have obtained manufacturer s undertaking with the invoice that the system offered meets the Technical requirements/standards of the MNRE guidelines on off grid SPV power plant systems under National Solar Mission. 6. The loan being extended has minimum lock in period of 3 years from the date of disbursement of the 1 st instalment of the loan. 7. We agree to refund Capital Subsidy to NABARD, if the installation is not complete / if the subsidy is found misutilised/accounts become NPA. 8. Capital subsidy amount of Rs. (Rupees ) may be released to our bank. Date: Asst Manager/Manager Branch Head Verified and found in order. Forwarded to Head Office, Kadapa for onward submission to NABARD. Date: Senior Manager Regional Manager Page 10 of 11

11 ANNEXURE V Format for Utilization Certificate - Capital Subsidy (For the use of financing Bank to be submitted to the Regional Office of NABARD) CAPITAL SUBSIDY CUM REFINANCE SCHEME FOR SOLAR LIGHTING SYSTEMS AND SMALL CAPACITY PV SYSTEMS UNDER JNNSM 1. Name of the Bank: 2. Subsidy received from NABARD (Date & Amount): Units: Date: Amount:Rs 3. Subsidy utilized: Units Amount: Rs This is to certify that the amount of Capital Subsidy received from NABARD has been fully utilized as per the terms and conditions of the project/mnre/nabard and as per the guidelines of the Scheme. Place : Date : ( ) Seal & Signature of the Branch Manager (Financing bank) Page 11 of 11