Generation Based Incentive Scheme
The GBI scheme, which stands for Generation-Based Incentive, is a type of incentive program. The Ministry of New and Renewable Energy launched the program to promote renewable energy resources. The scheme’s principal goal was to encourage grid-based solar and wind-powered electricity. Furthermore, Bridge loans were launched to give financial aid to those who wish to develop solar power projects and interactive grid wind turbines. The main focus of launching such schemes was to encourage people from diverse socioeconomic backgrounds to harvest their electricity, therefore, be completely independent electricity producers. GBI offered a three-year reward by giving out Rs. 2 per unit (kWh) of gross solar energy produced and supplied to the grid.
Bridge Loan against the GBI scheme
A bridge loan is taken based on the generation-based incentive (GBI) plan that gives away the GBI wind power producer reward of Rs.0.50 per unit of energy produced and contributed to the grid. The total annual distribution of the loan given by the ministry must not be more than 25% of the highest incentive limit of Rs.25 lakh per MW.
Industries Eligible for Bridge Loan
The Ministry of new and renewable energy allowed only three industries to be eligible for the Bridge loan. These industries are:
Renewable Energy
Clean Energy
Green Energy
Assistance provided
Sanctioned amount of the loan
The amount of loan that will be sanctioned depends upon pending GBI claims of the applicant that are waiting for their turn with the existing policies of the Generation Based Incentive Scheme. The complete operation regarding the loan amount that is needed to be sanctioned is carried out by IREDA.
Fiscal Investment
As per the fiscal Investment plan, the minimum amount of the loan is Rs. 20 Lakhs. The loan amount must be repaid from Generation Based Incentive profits, whether received or to be received from the MNRE (Ministry of New and Renewable Energy).
Rate of Interest for the Bridge Loan
The rate of Interest for the Bridge Loan Against GBI scheme is 0.90% per month or 10.80% per annum. The interest is charged on the daily basis and is continued till the complete payment of the given loan is not paid successfully. If enough electricity is not produced then in that case the applicant needs to pay the amount for that month from his pocket.
Repayment of the Bridge Loan
The repayment of the Bridge loan is adjusted or taken from the Generation based incentive receipt provided by the Ministry of New and Renewable Energy. Even though the payback amount is needed to be adjusted from the receipt, in some cases when there is not enough production of the electricity in those cases it is the responsibility of the applicant to repay the amount for that amount on his/her own.
Security
MNRE receivables are the charge on GBI. The borrower will create the charge within the time range provided by ROC.
Special conditions
The entire amount of the bridging loan must fall within the unutilized funds of the Government Budget/financial assistance/MNRE Scheme for Generation Based Incentive (GBI) for Grid Interactive Solar & Wind Power projects.
In case the application is accepted and later on the applicant of the GBI scheme is felt doubtful of cheating or indulging in such activities, the applicant is liable to pay the entire sum of the amount including the interest and other charges by himself or herself to IREDA.
In case of a shortfall, if the applicant is not paying for that month, the IREDA has the authority to adjust the amount by any other claim or payment by the applicant to another department that is under the supervision of IREDA.
Application Process
The application form is needed to be downloaded and then is needed to be given with the following copy of the documents:
A photocopy of the documents regarding the partnership or ownership or the authority of the organisation must be attached with the application form, such as AAO(Articles of Association), Memorandum of Articles (MOA), Partnership deed (In case there is any partnership).
The decision of the board to secure the bridge loan, the various plan criteria, and compliance with applicable stipulations must be given along with the application form.
For the signing of papers, a specimen copy of the signature, as well as the signatures of authorised officials, are required.
Conclusion
The Ministry of New and Renewable Energy proposed the GBI program to promote renewable energy in the country and make enterprises self-sufficient in terms of electricity generation. Later, the Bridge loan was announced to give financial assistance for the installation of renewable energy resources throughout the country and in all classes.