Scheme for Financing Compressed Biogas (CBG)

1. Project Developers/Entrepreneurs: This is the primary target group. This includes:
   1. Sole Proprietorships, Partnerships, Limited Liability Partnerships (LLPs), Companies, Cooperative Societies, and other legal entities permissible by MoPNG.
   2. They are the ones who set up, operate, and maintain CBG plants, including sourcing raw materials and ensuring product quality.
   3. A key pre-condition for project developers to avail financing under SATAT is to have been awarded a Letter of Intent (LOI) by Oil Marketing Companies (OMCs) like Indian Oil Corporation Ltd. (IOCL), Bharat Petroleum Corporation Ltd. (BPCL), Hindustan Petroleum Corporation Ltd. (HPCL), and GAIL for the production and supply of CBG. This LOI serves as an offtake guarantee, providing crucial bankability to the projects.
   4. As of February 2, 2024, specific financial assistance schemes for CBG producers procuring Biomass Aggregation Machinery (BAM) have been notified by the government, indicating a focus on easing feedstock supply.
2. Farmers and Agri-Entrepreneurs:
   1. They benefit by supplying diverse organic waste and biomass (e.g., agricultural residue, cattle dung, press mud, municipal solid waste, food waste, sewage sludge) as feedstock to the CBG plants, generating an additional revenue stream.
   2. They also benefit from the Fermented Organic Manure (FOM), a valuable by-product of CBG production, which is rich in nutrients and can reduce dependence on chemical fertilizers, promoting sustainable agriculture.
3. Rural Economy: The setting up of CBG plants, especially in rural areas, generates local employment opportunities (for plant operations, feedstock collection, and transportation) and fosters rural entrepreneurship.
4. Consumers: Benefits accrue to consumers through the availability of a cleaner, more affordable, and sustainable transportation fuel alternative to CNG and other fossil fuels. 

1. Anywhere in India: The scheme allows for the establishment of CBG plants across the entire country, without specific geographical restrictions based on state or region.
2. Strategic Location: While plants can be set up anywhere, the most viable locations are those with:
   1. Abundant and consistent availability of feedstock: Proximity to agricultural lands, livestock farms (for cattle dung), sugar mills (for press mud), or municipal waste collection points is crucial.
   2. Proximity to Offtake Points: Being close to OMC retail outlets or City Gas Distribution (CGD) networks for injecting CBG into the pipeline is beneficial for reducing logistics costs. The government is also promoting a Scheme for Development of Pipeline Infrastructure (DPI) for injecting CBG into CGD networks, with financial assistance for creating grid connectivity for initial 100 CBG projects to reduce logistics costs.
3. GOBARdhan Initiative: The GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) initiative, which focuses on converting cattle dung and other organic waste into biogas and bio-fertilizers, complements the SATAT scheme. Many CBG plants are registered on the GOBARdhan portal, which is a unified platform for tracking waste-to-wealth initiatives. 

1. Offtake Guarantee & Market Linkage:
   1. This is the cornerstone. OMCs offer a long-term offtake guarantee for CBG, typically for 10-15 years, ensuring a stable market and revenue stream for plant developers.
   2. The latest pricing revision as of May 15, 2025 (effective June 1, 2025) has linked the CBG procurement price to 85% of the average CNG retail price across GAIL-associated CGD companies (increased from 80%). This makes CBG production more financially viable.
   3. Transportation support has also been introduced: ₹1.5 per kg for distances between 50 and 75 km, and ₹2.5 per kg for distances beyond 75 km, addressing a long-standing demand from producers.
2. Central Financial Assistance (CFA) / Capital Grant:
   1. The Ministry of New and Renewable Energy (MNRE) provides CFA for CBG projects. As of recent notifications, this can be up to ₹4 Crore per 4,800 kg of CBG per day generated (from 12,000 cubic meters of biogas per day), with a maximum cap of ₹10 Crore per project.
   2. Additional subsidies for specific components or regions may also be available (e.g., for certain states, for linking plants with sanitary toilets, or for power generation from biogas).
   3. A new scheme provides financial assistance to eligible CBG producers (using at least 50% agri-residue as feedstock and with a capacity of at least 2 TPD CBG, registered on GOBARdhan portal) for procurement of Biomass Aggregation Machinery (BAM). This grant can be up to 50% of the machinery cost or a maximum of ₹90 lakh per set. Applications for this assistance can be submitted quarterly (e.g., from 1st to 30th of every quarter, as indicated for recent application windows).
3. Viability Gap Funding (VGF): While the term VGF is broadly used, the support mechanisms (offtake guarantee, capital grants, and favorable pricing) collectively aim to bridge any viability gaps for project developers, making projects economically attractive.
4. Priority Sector Lending (PSL) Status: Financing for CBG plants has been brought under Priority Sector Lending by banks, ensuring easier access to credit for project developers. Banks like SBI, Canara Bank, Union Bank of India, and Central Bank of India have specific loan schemes for CBG projects under SATAT.
5. Market Development Assistance: This involves efforts to raise awareness among consumers and industries about the benefits of CBG, facilitate its distribution, and build a robust supply chain. Promotion of Fermented Organic Manure (FOM) as a valuable by-product also falls under market development.
6. GobarDhan Unified Registration Portal: This online platform facilitates registration for all biogas/CBG/Bio-CNG plants in India, which is essential to avail benefits and support from various ministries. 

1. The Ministry of Petroleum and Natural Gas (MoPNG) is the nodal ministry for the SATAT initiative.
2. The Oil Marketing Companies (OMCs) (IOCL, BPCL, HPCL) are crucial nodal agencies for issuing LOIs, entering into offtake agreements, and setting up retail outlets for CBG.
3. The Ministry of New and Renewable Energy (MNRE) provides the Central Financial Assistance (CFA) for CBG plants.
4. Financial Institutions like Indian Renewable Energy Development Agency (IREDA) and various commercial banks offer specific loan schemes for CBG projects.
5. EIL (Engineers India Limited) has been designated as the Project Management Agency for the BAM financial assistance scheme.

To participate and benefit from this scheme: Project developers (entrepreneurs, businesses, groups, etc.) should:

1. Develop a detailed project report (DPR) for their proposed CBG plant, including feedstock details, production capacity, and financial projections.
2. Apply for a Letter of Intent (LOI) from any of the OMCs (IOCL, BPCL, HPCL, GAIL) under the SATAT scheme. This is a crucial first step for financial closure.
3. Register their CBG plant on the GOBARdhan portal (gobardhan.co.in) to obtain a registration number.
4. Approach banks or financial institutions (like IREDA) that offer loans for CBG projects under the Priority Sector Lending guidelines.
5. Apply for Central Financial Assistance (CFA) through the relevant MNRE channels (often through a designated online portal or directly to MNRE as per their guidelines).
6. For the Biomass Aggregation Machinery (BAM) scheme, applications are submitted through a designated portal (e.g., bam.eil.co.in) on a quarterly basis.
7. Ensure all statutory clearances and approvals (e.g., from Pollution Control Board, PESO) are obtained.