Government Subsidy for CBG Plant in Gujarat – Capital, Interest & Operational Support
Government Subsidy for CBG Plant in Gujarat – Capital, Interest & Operational Support
Introduction
Gujarat is taking significant steps to promote Compressed Biogas (CBG) plants by offering generous subsidies and incentives under its renewable energy initiatives. With a focus on biofuel production and sustainable energy, the state provides financial support for new and expanding CBG plants.
If you are planning to set up a CBG Plant in Gujarat, here’s a detailed breakdown of the subsidies available, eligibility criteria, and the step-by-step process to avail the incentives.
Types of Subsidies Available for CBG Plants in Gujarat
The Government of Gujarat offers multiple financial benefits, including capital subsidies, interest subsidies, operational assistance, employment incentives, and electricity duty exemptions.
| Type of Subsidy | CBG Plant (Investment < ₹200 Cr) | Mega CBG Project (Investment > ₹200 Cr) | Disbursement |
|---|---|---|---|
| Capital Subsidy | 25% of eligible fixed capital investment (eGFCI), up to ₹40 Cr | 25% of eGFCI, up to ₹200 Cr | In 20 quarterly installments over 5 years |
| Operational Assistance | 15% of operational cost, max ₹5 Cr per year | 15% of operational cost, max ₹25 Cr per year | On approval of application |
| Employment Generation Incentive | 50% of employee CTC (₹50,000/male, ₹60,000/female) | 50% of employee CTC (₹50,000/male, ₹60,000/female) | Beneficiary can choose quarterly, half-yearly, or annual claims |
| EPF Assistance | 100% EPF for female employees, 75% for male employees | 100% EPF for female employees, 75% for male employees | Annual reimbursement |
| Interest Subsidy | 7% interest subsidy on loans up to ₹100 Cr (max ₹7 Cr per annum) + Additional 3% for loans above ₹100 Cr (max ₹20 Cr per annum) | Same as regular CBG plants | For 5 years from plant commissioning |
| Electricity Duty | 100% exemption | 100% exemption | For 5 years |
| Facilitation Support | NA | Government appoints a dedicated officer (SPOC) for approvals and infrastructure support | Continuous support |
Eligible Fixed Capital Investment (eGFCI) Criteria
When calculating the eligible fixed capital investment (eGFCI) for subsidy and incentives, the following criteria apply:
| Eligible Fixed Capital Investment | Description of Criteria |
|---|---|
| Cost of Land | Not Covered for subsidy/incentive calculation. |
| Cost of Building | The cost of buildings cannot exceed 20% of the total eligible GFCI. |
| Other Infrastructure Facilities | Costs related to effluent treatment plants, testing facilities, shared data centers, etc., are included in eligible GFCI. |
| Other Utilities | Expenses for computers, software, furniture, fixtures, office equipment, and vehicles are NOT included in eligible GFCI. |
Eligibility Criteria for Subsidy
To qualify for the subsidy, a CBG plant must:
✅ Be a new or expansion project in Gujarat.
✅ Have a Gross Fixed Capital Investment (GFCI) that includes expenses for building, plant, machinery, and infrastructure (excluding land cost).
✅ Have a minimum project investment (for Mega Projects: ₹200 Cr or 500+ direct employment).
✅ Be engaged in biofuel production using agricultural waste, food waste, or other organic materials.
Steps to Apply for CBG Plant Subsidy in Gujarat
To avail the subsidy/incentives for a CBG plant, applicants must follow a structured process:
Step 1: Industry Connect, Query Resolution, and In-Principle Approval
- Connect with Department for preliminary discussions.
- Submit an initial proposal and resolve queries regarding project feasibility and eligibility.
Step 2: Application Submission, Physical Verification, and Approval of Claim Amount
- File an official application along with required documents such as project reports, financials, and technical specifications.
- The government conducts a physical verification of the plant infrastructure and operations.
- Post-verification, the final subsidy claim amount is approved.
Step 3: Post-Approval Disbursal of Capital and Operational Assistance
- Once the subsidy is approved, funds are disbursed in installments as per government norms.
- Operational assistance is provided periodically based on plant performance.
Step 4: Supplementary Claim Physical Verification & Disbursal
- Any additional subsidy claims, such as employment incentives and electricity duty exemptions, undergo another verification.
- Upon successful verification, the remaining financial assistance is disbursed.
Key Benefits of Setting Up a CBG Plant in Gujarat
✅ Subsidies Reduce Capital Costs – With up to ₹40 Cr for small projects and ₹200 Cr for mega projects, investment risks are minimized.
✅ Operational Support Boosts Profitability – Government assistance reduces running costs for CBG entrepreneurs.
✅ Favorable Business Environment – Gujarat offers a strong industrial ecosystem with easy access to raw materials and logistics.
✅ Growing Market Demand – Rising demand for green fuels in transport, industries, and power generation ensures profitability.
Conclusion
With aggressive subsidies and long-term financial support, Gujarat is positioning itself as India’s top destination for CBG plant investments. If you are planning to start a CBG plant, now is the best time to take advantage of these government incentives.
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