DETAILED PROJECT REPORT ON
BIO GAS REACTOR
M/s Amul Fed Dairy, Gandhi Nagar – Gujarat
Dairy Cluster
Submitted to
(Prepared under GEF-UNIDO-BEE Project)
Bureau of Energy Efficiency
4
th
Floor, Sewa Bhawan, Sector – 1, R. K. Puram, New Delhi - 110066
Prepared by
Confederation of Indian Industry
CII – Sohrabji Godrej Green Business Centre
Survey No. 64, Kothaguda Post, Near HITEC City
Hyderabad 500064
August 2018
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Table of Contents
List of Tables ...................................................................................................................................... 2
List of Figures ..................................................................................................................................... 2
List of Abbreviations .......................................................................................................................... 3
ACKNOWLEDGEMENT ........................................................................................................................ 4
1.EXECUTIVE SUMMARY .................................................................................................................... 5
1.1 Brief Unit Profile.................................................................................................................................. 5
1.2 Proposed EE Measure ......................................................................................................................... 5
1.3 Means of Finance ................................................................................................................................ 6
2. INTRODUCTION ABOUT AFDG ......................................................................................................... 7
2.1 Unit Profile .......................................................................................................................................... 7
2.2 Production Details ............................................................................................................................... 7
2.3 Typical Dairy Process Flow Diagram ................................................................................................... 8
2.3 Energy Profile .................................................................................................................................... 10
3. PROPOSED EE MEASURE – BIO GAS REACTOR ............................................................................... 12
3.1 Present System ................................................................................................................................. 12
3.2 Recommendation .............................................................................................................................. 12
3.3 Supplier Details ................................................................................................................................. 14
3.4 Savings............................................................................................................................................... 14
4. FINANCIAL ANALYSIS .................................................................................................................... 15
4.1 Project Cost ....................................................................................................................................... 15
4.2 Assumptions for Financial Analysis ................................................................................................... 15
4.3 Cash Flow Analysis ............................................................................................................................ 15
4.3 Sensitivity Analysis ............................................................................................................................ 16
5. ENERGY EFFICIENCY FINANCING IN MSMEs ................................................................................... 17
5.1 FI Schemes in Gujarat........................................................................................................................ 18
6. ENVIRONMENTAL AND SOCIAL BENEFIT ........................................................................................ 21
6.1 Environmental Benefit ...................................................................................................................... 21
6.2 Social Benefit..................................................................................................................................... 21
7. CONCLUSION................................................................................................................................ 23
8. ANNEXURE ................................................................................................................................... 25
8.1 Financial Quotation ........................................................................................................................... 25
D e t a i l e d P r o j e c t R e p o r t
List of Tables
Table 1: Unit Details ...................................................................................................................................... 5
Table 2: Proposed EE Measure ..................................................................................................................... 6
Table 3; Project Finance ................................................................................................................................ 6
Table 4: Unit Profile ...................................................................................................................................... 7
Table 5: Production Capacity ........................................................................................................................ 9
Table 6: Type of fuel used ........................................................................................................................... 10
Table 7: Fuel Consumption Details ............................................................................................................. 10
Table 10: Supplier Detail ............................................................................................................................. 14
Table 11: Savings Calculation ...................................................................................................................... 14
Table 12: Project Cost ................................................................................................................................. 15
Table 13: Cash flow of the project .............................................................................................................. 15
Table 14: Capital Structure ......................................................................................................................... 15
Table 15: NPV Calculation ........................................................................................................................... 16
Table 16: Sensitivity analysis: based on energy savings ............................................................................. 16
Table 17: Sensitivity analysis: change in operating hrs ............................................................................... 16
Table 18: Sensitivity analysis: change in interest rate ................................................................................ 16
Table 19: FI schemes in Gujarat .................................................................................................................. 18
Table 20: Proposed EE Measure ................................................................................................................. 23
Table 21: Financial Analysis ........................................................................................................................ 23
List of Figures
Figure 1: Milk Processed ............................................................................................................................... 7
Figure 2: Typical process flow of Milk manufacturing .................................................................................. 8
Figure 3: Share of fuel cost ......................................................................................................................... 11
Figure 4: Fuel Cost Electrical vs Thermal .................................................................................................... 11
Figure 5: Fabric used for biogas .................................................................................................................. 12
Figure 6: Layout of FOV Bio Gas Technology .............................................................................................. 13
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List of Abbreviations
AFDG
Amul Fed Dairy Gandhinagar
BEE
Bureau of Energy Efficiency
CS
Capital Structure
°C
°Celsius
CO
2
Carbon dioxide
DPR
Detailed Project Report
EE
Energy Efficiency
FI
Financial Institution
GCMMF
Gujarat Cooperative Milk Marketing Federation
GEF
Global Environmental Facility
IRR
Internal Rate of Return
kW
Kilo Watt
LSP
Local Service Provider
MSME
Micro and Medium Scale Industries
NPV
Net Present Value
OEM
Original Equipment Manufacturer
RE
Renewable Energy
SBI
State Bank of India
SIDBI
Small Industrial Development Bank of India
TOE
Tonnes of Oil Equivalent
UNIDO
United Nations Industrial Development Organisation
WACC
Weighted Average Cost of Capital
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ACKNOWLEDGEMENT
Confederation of Indian Industry (CII) would like to express its sincere thanks to United Nations
Industrial Development Organization (UNIDO), Global Environment Facility (GEF) and Bureau of
Energy Efficiency (BEE) for the role played by them in guiding and steering this prominent
assignment - “Capacity Building of Local Service Providers in Gujarat Dairy Cluster”
CII is grateful to Mr. Milind Deore, Director, Bureau of Energy Efficiency, Mr. Sanjay Shrestha,
Industrial Development Officer, Industrial Energy Efficiency Unit, Energy and Climate Branch,
UNIDO, Mr. Suresh Kennit, National Project Manager, UNIDO and Mr. Niranjan Rao Deevela,
National Technology Coordinator, Energy Efficiency & Renewable Energy in MSMEs, UNIDO for
their support and guidance during the project.
CII would like to give special gratitude to Gujarat Cooperative Milk Marketing Federation
(GCMMF) for supporting CII for carrying out this project at Gujarat Dairy Cluster and for their
constant support and coordination throughout the activity. CII team is also grateful to the M/s
AFDG especially Mr. R S Sodhi, Managing Director, Mr. A K Bayati GM in charge, Mr. P K Sarkar,
OSD, Uitilities and Projects and Mr. Prashant Seth, Sr Manager, Utility for showing keen interest
in this implementation of this technology and providing their wholehearted support and
cooperation for the preparation of this Detailed Project Report.
CII also thanks Mr. Falgun Pandya, Cluster leader for Gujarat Dairy cluster for the continuous
support extended all throughout this activity.
We also take this opportunity to express our appreciation to the Original Equipment Suppliers
and Local Service Providers for their support in giving valuable inputs and ideas for the
completion of the Detailed Project Report.
We would also like to mention that the valuable efforts being taken and the enthusiasm displayed
towards energy conservation by the Gujarat Dairy Cluster is appreciable and admirable
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1. EXECUTIVE SUMMARY
Bureau of Energy Efficiency (BEE), a statutory body under Ministry of Power, Government of
India, in collaboration with United Nations Industrial Development Organization (UNIDO) is
executing a Global Environment Facility (GEF) funded national project “Promoting energy
efficiency and renewable energy in selected MSME clusters in India”.
The overall aim of the project is to develop and promote a market environment for introducing
energy efficiency and enhanced use of renewable energy technologies in process applications in
12 selected energy-intensive MSME clusters across 5 sectors in India (with expansion to more
clusters later). This will enable improvement in the productivity and competitiveness of units, as
well as reduce overall carbon emissions and improve the local environment.
Key activities involved in the project are shown below
➢ LSP MAPPING: Detailed Mapping of LSPs in the cluster.
➢ TECHNOLOGY FEASIBILITY STUDIES: Preparation of 10 bankable DPRs.
➢ TRAINING MATERIALS: Development of 5 customized training material based on mapping
➢ TRAINING PROGRAM: Conduct 4 training programs in the cluster for the capacity building
of local service providers.
➢ LSP’s AS LOCAL DISTRIBUTORS: Mapping of LSPs and OEMs so that LSPs can be local
dealers for major OEMs.
1.1 Brief Unit Profile
Table 1: Unit Details
Particulars
Details
Amul Fed Dairy , Gandhinagar
Mr. R S Sodhi, Managing Director
Mr. Prashant Seth
Cooperative Society
Large Scale
Plot No 35, Gandhinagar- Ahmedabad Road ,Bhat , Gujarat
Dairy
1.2 Proposed EE Measure
After the discussion with the plant team, it has been decided to install bio gas reactor to process
the canteen food waste and generate energy. The details of the proposed EE measure is given in
below table:-
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Table 2: Proposed EE Measure
Sl No
EE Measure
Annual Energy Savings
Monetary
Savings
(Rs. Lakhs)
Investment
(Rs. Lakhs)
Payback
(Months)
AnnualTCO
2
reduction
kg LPG
TOE
1
Installation
of Bio Gas
Reactor
9,000
10.65
4.79
11.12
28
26.82
1.3 Means of Finance
The details of means of finance for the proposed EE measure is as under:
Table 3; Project Finance
Sl. No.
Particulars
Unit
Value
i
Total Investment (Incl of Tax)
Rs. Lakh
11.12
ii
Means of Finance
Self / Bank Finance
Self
Iii
IRR
%
62.31
Iv
NPV at 70 % Debt
Rs. Lakh
19.19
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2. INTRODUCTION ABOUT AFDG
2.1 Unit Profile
Amul is the apex organisation of the Dairy Cooperatives of Gujarat which aims to provide
remunerative returns to the farmers and also serve the interest of consumers by providing quality
products which are good value for money. AFDG was established with the objective of receiving
of “Surplus Milk” from the Member Unions Cooperative Dairies of Gujarat State and convert it to
milk products and also to supply milk round the year to meet liquid milk market demand of
Ahmedabad and Saurashtra.
Table 4: Unit Profile
Particulars
Details
Amul Fed Dairy , Gandhinagar
Mr. R S Sodhi, Managing Director
Mr. Prashant Seth
[email protected]oop
07574802084
Cooperative Society
SME
72
24
360
Plot No 35, Gandhinagar- Ahmedabad Road ,Bhat , Gujarat
Dairy
Milk ,Ghee, Dahi, Butter milk, Powder
2.2 Production Details
The various products manufactured in AFDG dairy are liquid milk, butter milk, flavoured milk,
lassi, ghee and ice cream. The graph below shows the milk processed during last one year
Figure 1: Milk Processed
-
200.00
400.00
600.00
800.00
1,000.00
1,200.00
Lakh Litres per month
Milk Processed (Lakh litres
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2.3 Typical Dairy Process Flow Diagram
Milk Receipt, Filtration and Clarification
Storage
Separation &
Standardization
Pasteurization
Homogenization
Homogenization
Deodorization
Storage
Packing and Storage
Distribution
Butter Churning
Packaging and
Freezing
Whole Milk
Cream
Skimmed Milk
Whole Milk
Skimmed Milk
Cream
Cream
Butter
Butter
Butter Milk
Dairy Products
Figure 2: Typical process flow of Milk manufacturing
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The processes taking place at a typical milk plant after receiving and filtration of milk from the
chilling units includes:
Separation: After being held in storage tanks at the processing site, raw milk is heated to
separation temperature in the regeneration zone of the pasteurizer. The milk (now hot) is
standardized and homogenized by sending it to a centrifugal separator where the cream fraction
is removed. The skim is then usually blended back together with the cream at predefined ratios
so that the end product has the desired fat content. Surplus hot cream is cooled and usually
processed in a separate pasteurizer ready for bulk storage and transportation to a cream packing
plant.
Pasteurization is a process of heating milk to 72°C for 16 seconds then quickly cooling it to 4°.
This process slows spoilage caused by microbial growth in the food. Unlike sterilization,
pasteurization is not intended to kill all micro-organisms in the food. Instead, it aims to reduce
the number of viable pathogens so they are unlikely to cause disease.
Homogenization (if required): Milk must then be homogenized. Without homogenization, the
milk fat would separate from the milk and rise to the top. Milk fat is what gives milk its rich and
creamy taste. Homogenization makes sure that the fat is spread out evenly in the milk so that
every sip of milk has the same delicious flavor and creamy texture. Milk is transferred to a piece
of equipment called a homogenizer. In this machine the milk fat is forced, under high pressure,
through tiny holes that break the fat cells up in to tiny particles, 1/8 their original size. Protein,
contained in the milk, quickly forms around each particle and this prevents the fat from rejoining.
The milk fat cells then stay suspended evenly throughout the milk
Packaging and storage: Milk is pumped through automatic filling machines direct into bags,
cartons and jugs. The machines are carefully sanitized and packages are filled and sealed without
human hands. This keeps outside bacteria out of the milk which helps keep the milk stay fresh.
During the entire time that milk is at the dairy, it is kept at 1°-2°C. This prevents the development
of extra bacteria and keeps the milk fresh.
The table below shows the production capacity of various section in plant.
Table 5: Production Capacity
Sl No
Product
UOM
Quantity
1
Milk Processing
Lakh Litres per Day
32
2
Milk Packaging in Poly Pouches
Lakh Litres per Day
12
3
Ghee Manufacturing and Packaging
MT/day
60
4
Milk Powder Manufacture and Packaging
MT/day
160
5
Ice Cream Manufacture and Packaging
KL/day
150
6
UHT Processing and Expecting Packaging
in Tetra Pack
KL/day
600
7
Frozen Pizza Manufacturing and
Packaging
Pieces/day
15000
8
Cultured Milk Product
Tons/day
4
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9
UHT Processing and Aseptic Packaging in
Pet Bottle
KL/day
100
10
Butter Plant
Tons/day
40
2.3 Energy Profile
Both electricity and thermal energy are used for carrying out various dairy processing activities.
The following fuels are used in the plant: -
Table 6: Type of fuel used
Sl. No.
Type of fuel/Energy used
Unit
Tariff
GCV
1
Electricity
Rs./kWh
7.90
2
Natural Gas
Rs/SCM
27
8750
3
Bio gas
The table below shows the monthly consumption of various fuel used in the plant during the
last one year
Table 7: Fuel Consumption Details
Month
Electricity Consumption (kWh)
Fuel Consumption – NG (SCM)
Bio Gas from ETP (
SCM)
Apr-17
54,19,313
9,96,870
1,25,200
May-17
58,06,800
10,33,427
1,33,200
Jun-17
49,87,540
7,38,025
1,27,700
Jul-17
41,65,900
6,76,852
1,17,960
Aug-17
42,33,800
5,47,415
1,26,000
Sep-17
42,58,080
6,20,058
1,21,500
Oct-17
49,06,300
10,05,865
1,30,000
Nov-17
49,75,852
13,03,072
1,32,680
Dec-17
49,07,600
14,46,200
1,13,750
Jan-18
52,30,000
14,92,005
1,09,200
Feb-18
50,98,700
13,24,665
1,25,200
Mar-18
58,35,200
14,03,537
1,27,000
Total
5,98,25,085
1,25,87,990
14,89,390
The major form of energy used in the plant is electricity which is from UGVCL grid. For thermal
plant is using NG as the major fuel and also Bio gas from ETP. The percentage share of fuel cost
is shown below:
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Based on the data collected from the plant, the graph above shows the variation of fuel cost
over the last one year. Average electricity cost is Rs 3.93 Crore/month whereas the average
thermal energy cost is Rs 2.83 Crore/month.
Figure 3: Share of fuel cost
58%
42%
Share of Fuel Cost
Electricity Share
NG Share
-
100.00
200.00
300.00
400.00
500.00
1 2 3 4 5 6 7 8 9 10 11 12
Rs Lakhs
Fuel Cost Electrical vs Thermal
Electrical Cost NG Cost
Figure 4: Fuel Cost Electrical vs Thermal
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3. PROPOSED EE MEASURE – BIO GAS REACTOR
3.1 Present System
The plant is having a canteen which is catering food to around 600 employees in the plant.
Currently for all the cooking purposes bio gas from the ETP and LPG is used as fuel for cooking.
The average amount of food waste generated per day from the canteen is 500 kg. The food waste
generated from the canteen is disposed outside.
However, the canteen waste been organic in nature and high in organic content it can be
converted into biogas and manure using an anaerobic digestion process. The anaerobic digestion
process would address two aspects – generation of Non-fossil fuel-based energy and the
avoidance of waste going to landfill. The biogas generated can be further purified and can
substitute the use of LPG in the canteen and the manure generated from the process can be used
for gardening process. Recently there have been many developments in Biogas digestion
technologies and the economics have also improved substantially. With rising fossil fuel price and
especially LPG, the installation of Bio-digesters to generate biogas can be good substitute of
conventional source of energy and would result in both environment and economic benefits to
the company.
3.2 Recommendation
Most commonly used models are fixed dome reactors, floating drum reactors and off late there
has development of few mild steel-based digesters. There has not been much innovation in the
design during the past several years. With the older designs usage of mild steel and concrete also
adds up to cost of the digester. One of the main challenges has been the developing digesters
with simplicity in operation and maintenance. Mild steel digesters have major challenges such as
rusting due to H2S content in the biogas and exposure to wet weather conditions among other
problems.
It is recommended to install Bio gas plant
which is a fabric-based bio gas technology
for processing 500 kg food waste daily.
This technology would process all the
canteen waste that is generated inside the
plant rather than disposing it outside.
Figure 5: Fabric used for biogas
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The schematic layout of the proposed system is given below.
Biogas plant will be initially loaded with active inoculum to start the process. After the initial
loading is complete, 500kgs of food waste is mixed with 500 litres of water to reach slurry form
by feeding in a crusher. The slurry will be fed in to a feeding tank. The organic waste from feeding
tank will be fed in to a 50 m
3
biogas reactor. The reactor will have 30 m
3
liquid space and rest 20
m
3
gas storage space. The additional gas generated can be stored in a gas holder. 1 m
3
of diluted
organic waste in a slurry form will be fed in to the reactor every day. The excess liquid slurry
coming out of the digester can be re-circulated back as a replacement for fresh water.
On an average, the reactor will have a 30 days retention time. Under optimized running
conditions the biogas plant will generate about 50m
3
1
of biogas per day. The feeding and
digestate collection is a continuous process. The biogas generated will be piped to the kitchen
and used for cooking by using biogas burners. The total area required for the biogas plant is about
80 m
2
space. The design of the biogas plant can be adjusted according to the space availability.
Benefits of new system
• Plug and flow digester (no settlement of sludge, natural mixing of organic waste)
• Low operations and maintenance costs
• No rusting unlike other designs which are made of mild steel for digester tanks and for
gas collection
1
Guaranteed by supplier
Figure 6: Layout of FOV Bio Gas Technology
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• No moving parts used for feeding, mixing and sludge outflow as all the operations are
based on natural gravity-based process. Very low captive power consumption for
operating the digester
• In built gas space at the top of digester which can hold up to 50% of total gas generated.
• Highest material quality
3.3 Supplier Details
Table 8: Supplier Detail
Equipment Detail
500 kg Processing Bio Gas Plant
Supplier Name
2
FOV Bio Gas India
Address
FOV Bio Gas India
420 CDS Apartment, Tansi Nagar
Velachery , Chennai
Pin 600042
Contact Person
Mr. Jospeh Arulappan
Mail Id
joseph@nordcleantech.com
3.4 Savings
The expected energy savings by installation of Bio Gas technology is 9000 kg of LPG annually with
energy reduction of 10.65 TOE/year. The annual monetary saving for this project is Rs 4.79 Lakhs
with an investment of Rs 11.12 lakhs and payback for the project is 27 months.
Detailed savings calculations are given in below table
Table 9: Savings Calculation
Parameters
UOM
Existing System
Proposed System
Canteen waste generated per day
kg
500
500
LPG used per day
kg
25
NIL
Gas Potential from 500 kg waste
m
3
/day
50
50
Operating days/annum
360
360
Annual Energy Savings
kg LPG
-
9000
LPG Cost
Rs/kg
53.23
53.23
Annual Cost Savings
Rs/lakh
-
4.79
Investment
Rs/lakh
-
11.12
Payback
Months
-
27
2
Bio Gas reactor is a unique technology supplied by FOV Bio Gas India only
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4. FINANCIAL ANALYSIS
4.1 Project Cost
Table 10: Project Cost
Parameter
Amount in Rs Lakhs
Bio Gas Plant Cost
9.42
GST @18%
1.69
Total Project Cost
11.12
4.2 Assumptions for Financial Analysis
• Interest rate taken as 12 %
• Yearly increase in electricity cost by 2% for cash flow analysis
• Life cycle of the project is taken as 7 years
• Three different Capital Structure considered
o CS1 – 70:30 Debt Equity Ratio
o CS2 – 50:50 Debt Equity Ratio
o CS3 – 100 % Equity
• Return on equity is taken as 15 %
• Depreciation – 40%
• Operation and Maintenance Cost taken as 5% of Initial investment
• For calculating weighted average cost of capital, tax rate is assumed as 30 %
4.3 Cash Flow Analysis
Table 11: Cash flow of the project
Cash flow for the
project
1
2
3
4
5
6
7
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Required Investment
11.12
Energy Savings
4.79
4.89
4.98
5.08
5.19
5.29
5.40
O&M Cost
-0.56
-0.56
-0.56
-0.56
-0.56
-0.56
-0.56
Depreciation
4.4
2.7
1.60
1.0
0.6
0.3
0.2
Net Cash Flow
-11.12
8.68
7.00
6.03
5.49
5.21
5.08
5.05
The table below shows the various capital structure assumed for the project finance
Table 12: Capital Structure
Capital Structure
Particulars
CS 1
CS 2
CS 3
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Debt
70
50
0
Cost of Debt
0.12
0.12
0.12
Equity
30
50
100
Cost of Equity
0.15
0.15
0.15
WACC
10.38
11.7
15
Table 13: NPV Calculation
NPV Calculation
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
NPV
NPV at CS 1 (70:30)
-11.12
7.9
5.7
4.5
3.7
3.2
2.8
2.5
19.2
NPV at CS 2 (50:50)
-11.12
7.8
5.6
4.3
3.5
3.0
2.6
2.3
18.1
NPV at CS 3 (100% Equity)
-11.12
7.5
5.3
4.0
3.1
2.6
2.2
1.9
15.5
4.3 Sensitivity Analysis
A sensitivity analysis has been carried out to ascertain how the project financials would behave
In different situations such as
• Change in energy savings
• Change in operating hours
• Change in interest rate
A good sensitivity analysis will help to estimate the behavioral nature thereby helping to
understand the financial viability over a long period of time.
Table 14: Sensitivity analysis: based on energy savings
Based on Savings
at 100% Savings
at 75% Savings
at 50% Savings
NPV at CS 1 (D70:E30)
19.2
13.1
7.1
NPV at CS2 (D50:E50)
18.1
11.1
5.6
NPV at CS3 (D0:E100)
15.5
10.3
5.0
IRR
62%
48%
33%
Table 15: Sensitivity analysis: change in operating hrs
Based on Operating
Hours
at 100% operating
hours
at 90% Operating
hours
at 80% Operating
hours
NPV at CS 1 (D70:E30)
19.2
16.8
14.3
NPV at CS2 (D50:E50)
18.1
15.7
13.4
NPV at CS3 (D0:E100)
15.5
13.4
11.3
IRR
62%
57%
51%
Table 16: Sensitivity analysis: change in interest rate
Based on
Interest Rate
at 9.5%
interest
rate
at 10.05%
interest rate
at 11%
interest
rate
at 12%
Interest
Rate
at 12.5%
Interest
Rate
at 13%
Interest
Rate
NPV (70:30)
20.3
19.9
19.6
19.19
18.97
18.76
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5. ENERGY EFFICIENCY FINANCING IN MSMEs
Financing plays a key role in facilitating procurement and implementation of energy efficient
technologies and products in any industry. Government has given EE financing in MSMEs top
priority since the sector contributes significantly towards India’s economic growth. However,
existing financing options are not sufficient to meet the financing requirement in the sector due
to the large size of the sector. MSMEs using various financing schemes for technological up-
gradation are still very less, as most of them use their own capital fund rather than making use
of external financing models. Although financing models were very successful in some clusters,
the scale-up of such activities is rather slow. This slow pace in implementation of energy
efficiency financing in MSMEs is due to the various sector specific challenges in the sector.
Some of the key barriers to finance EE projects in the sector are: -
• Lack of available capital for investment as EE interventions being small may not get
financed through FIs as they do not qualify as term loans
• Lack of clarity on financing schemes- repayment mechanism and complex procedural
requirements
• Lack of availability of financing model that cater to the particular requirement of the
MSME
• Lack of awareness among MSMEs with respect to benefits of implementing EE
technologies
• FIs consider MSMEs as a high-risk category due to low credit flow to this sector. This is
due to several factors such as poor book-keeping practices, weak balance sheets, poor
credit history and smaller sizes of MSME loans.
• Collateral based lending, advocated by FIs, restricts MSMEs from availing loans
• No formal M&V procedure available to estimate the savings achieved by implementing
EE measure
• Risks associated with repayment of loans which include technical, commercial and
performance risks
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5.1 FI Schemes in Gujarat
Table 17: FI schemes in Gujarat
Sl.N
o
Name of Scheme
Purpose
Financial Details
Contact Address
1
SIDBI Make in India
Soft Loan Fund for
Micro, Small &
Medium
Enterprises (SMILE)
• The focus of the scheme is on
technology upgradation which helps in
reducing the impacts from process and
operations as the reduction in resource
consumption and productivity
improvements are major outcome of
technology upgradation
• The program aims to bridge the gap by
providing financial support to the
companies.
• Rate of interest is according to credit
rating
• Interest rates for soft loans are from
(8.90 % to 8.95 % pa) and term loans are
in the range of (9.45% to 9.60% pa)
• Min loan amount: Rs 25 Lakhs
• Term Loan: 75% of the project cost as
debt
Mr. Chandan
SIDBI, Bhavan, Ist Floor, P.B.No.
10, Navjivan P.O., Ahmedabad
Ph No : : 8769436639
Mail Id:
ahmedabad@sidbi.co.in
2
4E scheme (End to
End Energy
Efficiency Financing
scheme)
• The 4E scheme promoted by SIDBI aims
to assist the industries in
implementation of energy efficiency
and renewable energy projects.
• The scheme addresses all aspects of
energy efficiency in a company from
assessment and identification of energy
efficiency interventions to facilitating
implementation by providing technical
and financial support
• Interest rate - 2.5% below market
interest rate
• Min loan amount: Rs 10 Lakhs
• Max loan amount: Rs 150 Lakhs
• 90% of the project cost as debt
Mr. Chandan
SIDBI, Bhavan, Ist Floor,
P.B.No. 10, Navjivan P.O.,
Ahmedabad.
Ph No : 8769436639
Mail Id:
ahmedabad@sidbi.co.in
3
Partial Risk Sharing
Facility for Energy
Efficiency project
(PRSF)
• The partial risk sharing facility aims at
transforming the energy efficiency
market in India and promotion of
Energy Service Contracting Model for
the Energy Efficiency.
• The scheme address barrier related to
the financing aspects for energy
efficiency
• Term Loan: 12%-15%
• Min loan amount: Rs 10 Lakhs
• Max loan amount: Rs 15 Cr
• Total Project funding of – USD 43 million
• Risk Sharing facility component of USD
37 million to be managed by SIDBI
• Technical assistance component of USD 6
billion to be managed by SIDBI and EESL
Mr. Chandan
SIDBI, Bhavan, Ist Floor, P.B.No.
10, Navjivan P.O., Ahmedabad.
Ph No : 0562-2521023
Mail Id:
ahmedabad@sidbi.co.in
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4
Bank of Baroda’s
Scheme for
Financing Energy
Efficiency Projects
All these schemes from various banks
(SBI, Bank of Baroda, and Canara Bank)
have their focus towards technology
upgradation. Technology upgradation
can lead to improvement in energy,
productivity, and lower emission from
the MSME company.
As technology upgradation could be
capital intensive most of the schemes
from banking institutions aim at bridging
the gaps for access to finance for MSME
sector
• Loans of up to 75% of the total project
cost, subject to maximum of Rs. 1 crore,
will be provided. (Minimum amount of
loan Rs. 5 Lakhs
• Collateral will be required for all loans.
An interest rate of bank base rate + 4%
will be applicable, to be paid back over a
period of 5 years.
Bank of Baroda
SME Loan Factory
2
nd
Floor Baroda Towers,
Ellisbridge, Ahmedabad
Ph No : 9979867501
Mail Id :
cpc.sme.ahmedabad@bankofb
aroda.com
5
Canara Bank’s Loan
scheme for Energy
Savings for SMEs
• The scheme covers up to 90% of project
costs of up to INR 1 million (EUR 13,000).
• Max. loan: INR 10 million (EUR 130,000)
• Security: collateral free up to INR 5
million (EUR 65,000), beyond INR 5
million collateral required as determined
by the bank
• Margin: 10% of project costs
Swaraj Arcade, Kumudvadi
Opp.Lal Tanki, Chitra
Road,Bhavnagar-364002
Ph No : 0751-2233141/
2431541
Email Id :
cb4831@canarabank.com
6
SBI’s Project
Uptake for Energy
Efficiency
• SBI identifies industrial clusters with
potential for quick technology
upgradation and a supporting
environment. Based on studies in
interested units, technology upgradation
is undertaken if the same in viable.
• With a ceiling of INR 1 lakh, an amount
equal to that invested by the unit is
provided under this loan. There is a start-
up period of 3 years, with a repayment
period of 5-7 years, at zero interest.
SBI SMECC
Ground Floor, Zodiac Avenue,
Opp Commisionar Bunglow,
Navrangpura, Ahmedabad,
Gujarat Ph No : 022 22029456
Email Id : sb[email protected]
7
Solar Roof Top
Financing Scheme
IREDA
The loan scheme is applicable to grid
interactive, rooftop solar PV plants for
industries, institutions and commercial
establishments. Financing can be
accessed for single or aggregated
investments.
• Interest rate: 9.9% - 10.75%
• Max. repayment time: 9 years
• Minimum promoter’s contribution: 30%
• The applicant’s minimum capacity needs
to be 1MW
IREDA Camp Office
603, Atlanta Towers
Near Panchvati Circle,
Gulabi Tekra
Ahmedabad
Ph No : 9811889805
Email Id : asho[email protected]
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8
SBI - World Bank:
Grid Connected
Rooftop Solar PV
Program
Loans for financing grid connected
rooftop solar photovoltaic (GS- RSPV)
• Loan amount is 75% of the project cost
• Fixed Asset coverage ratio: >1.25
• Moratorium period: upto 12 months
from date of commencement of
commercial operations
• Guarantee: in case of sole
proprietorship/partnership
firm/personal guarantee of partners
SBI SMECC
Ground Floor, Zodiac Avenue,
Opp Commisionar Bunglow,
Navrangpura, Ahmedabad,
Gujarat Ph No : 022 22029456
Email Id : sbi.60438@sbi.co.in
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6. ENVIRONMENTAL AND SOCIAL BENEFIT
6.1 Environmental Benefit
A resource-efficient business demonstrates a responsibility towards the environment. Energy and
the environment are so closely linked, that, in addition to saving energy and reducing utility
expenses, there are additional and often unreported benefits from conserving energy, saving
natural resources being an important benefit.
Energy efficiency plays a major role, even where company output is increased, energy efficiency
improvements can contribute significantly in most cases to reducing the negative impact of energy
consumption per unit of output. Any increase in pollutant emissions will thus be minimized.
Significant environmental benefits gained by adopting energy efficient technologies and processes
may include lowering the demand for natural resources, reducing the emission of air pollutants,
improving water quality, reducing the accumulation of solid waste and also reducing climate change
impacts. Improving energy conservation at the facility can improve the facility's overall efficiency,
which leads to a cleaner environment.
Reduction in Pollution Parameters
The proposed EE measure of installing Bio Gas Plant for processing food waste would result in
annual LPG savings of 9,000 kg which is equivalent to 10.65 TOE per annum. The proposed EE
measure will result in decrease of CO
2
emissions by 26.82 TCO
2
annually, thus resulting in reduced
GHG effect.
6.2 Social Benefit
Work Environment
The Factories Act, 1948 covers various aspects relating to working environment maintenance and
improvement. The good maintenance practices, technology up gradation, efficient use of energy
and resource conservation not only contribute to energy and pollutant reduction but also
contributes in ensuring safe and clean working environment to the employees of the organization.
Many units have also been doing review of safety process and have provided access to safe working
environment to the workers. Basic facilities such as first aid kit, PPE gears and many others have
been made available
Skill Improvement
Implementing energy efficiency measures requires mix of people and skills. It involves upskilling
workers at all levels from the shop floor to the board room to understand how companies manage
their energy use—and to identify, evaluate and implement opportunities to improve energy
performance. As the project involved identifying energy saving projects, implementing and verifying
the savings, the unit have understood how to estimate energy savings with respect to energy saving
proposals and also energy wastage have been identified. The activity has been successful in bringing
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the awareness among workers on energy wastage reduction, technology up gradation possible, etc.
Each new technology implemented in a dairy plant will create an impact on the entire Gujarat Dairy
cluster as each dairy unit can replicate the new technology and promote the concept of energy
efficiency in entire Gujarat Dairy Cluster and thus reduce the overall energy consumption of the
cluster as a whole.
Technical skills of persons will be definitely improved. As the training provided by the OEMS’ on
latest technology will create awareness among the employees on new trends happening in market.
The training also helps in improving the operational and maintenance skills of manpower required
for efficient operation of the equipment.
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7. CONCLUSION
Energy efficiency is an instrument to address the issue of energy crisis and also be employed as a
cost-effective means to attain sustainability and business. Cost of energy is considered as a vital
component for industries and warrant judicious use of energy. Amid spiraling power cost energy
efficiency assumes at most importance for the sector to remain competitive.
The GEF, UNIDO and BEE project through its various engagements is able to demonstrate energy
efficiency potential in Gujarat Dairy cluster. The project is able to promote the concept of energy
efficiency and renewable energy in dairy cluster through various capacity building programs for local
service providers, technology feasibility studies in dairy units, training programs on EE/RE
technologies and also helped in penetrating new /latest technologies into the cluster.
The DPR on for installation of Bio Gas Plant has been prepared after the OEM came to the dairy and
done a detailed feasibility study. This measure will result in an annual LPG savings of 9,000 kg of LPG
which is equivalent to 10.65 TOE/year with 26.82 TCO
2
reduction. The following table gives the
overall summary of the savings achieved:
Table 18: Proposed EE Measure
Sl No
EE Measure
Annual Energy Savings
Monetary
Savings
(Rs. Lakhs)
Investment
(Rs. Lakhs)
Payback
(Months)
AnnualTCO
2
reduction
Kg LPG
TOE
1
Installation of
Bio Gas
Reactor
9,000
10.656
4.79
11.12
28
26.82
The summary of financial analysis given in the below table clearly indicates that implementation of
this project is economically and financially viable with an attractive payback period. So it is
recommended to install bio gas reactor to process canteen waste.
Table 19: Financial Analysis
Sl. No.
Particulars
Unit
Value
i
Total Investment (Incl of Tax)
Rs. Lakh
11.12
ii
Means of Finance
Self / Bank Finance
Self
Iii
IRR
%
19.19
Iv
NPV at 70 % Debt
Rs. Lakh
62.31
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7.1 Replication Potential
Most of the units in Gujarat Dairy cluster have big canteens for their employees, so the concept of
Bio gas reactor has a huge replication potential in the cluster. Also the bio gas technology can be
also installed in all ETPs of dairy plant to capture the methane and thereby producing energy. The
implementation of this project will inspire other units to take up similar energy efficiency initiatives
which eventually will lower the bottom line and increase the top line therefore the margin increases.
Secondly, the very clear specifications on vendor and the cost base is already available which makes
it easy for other units in the Gujarat Dairy cluster to access the technology and gives them a very
good idea about the cost and benefits associated with the projects. Overall, the holistic approach
adopted by the project will be extremely useful in achieving the goal of improving EE in the cluster.
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8. ANNEXURE
8.1 Financial Quotation
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