HOW TO APPLY FOR MNRE SUBSIDY FOR BIOMASS PELLET PLANT IN INDIA.

 Introduction

India is rapidly moving toward renewable energy and sustainable fuel alternatives, and biomass pellets are playing a major role in this green revolution. To promote clean energy adoption and reduce dependence on coal, the Ministry of New and Renewable Energy (MNRE) offers attractive subsidies and financial assistance for setting up biomass pellet and briquette manufacturing plants across the country.

Under the National Biomass Programme (Phase-II), MNRE provides Central Financial Assistance (CFA) to encourage entrepreneurs, MSMEs, and industries to invest in biomass pelletization projects. This subsidy helps reduce project costs, improves ROI, and makes the business more viable—especially for rural and agro-based entrepreneurs.

This blog will guide you step-by-step on how to apply for MNRE subsidy for biomass pellet plants in India, covering:

·      Eligibility criteria for MNRE subsidy

·      Step-by-step application process through the BioURJA Portal

·      Required documentation and approvals

·      Subsidy rates for torrefied and non-torrefied pellets

·      List of banks and financial institutions that provide loans

·      Processing duration, terms, and subsidy release conditions

Whether you are planning a 1 TPH, 2 TPH, or 5 TPH biomass pellet plant, this guide will help you understand every important detail—from preparing your project report (DPR) to getting financial approval and claiming your subsidy successfully.

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 Subsidy Overview

The MNRE Biomass Programme (2021–2026) provides financial support for setting up new biomass briquette or pellet plants.

·      For non-torrefied pellets, subsidy is up to ₹21 lakh per MTPH capacity (maximum ₹1.05 crore or 30% of plant & machinery cost).

·      For torrefied pellets, subsidy is up to ₹42 lakh per MTPH (maximum ₹2.10 crore or 30% of cost).

·      For traditional briquette plants, subsidy is ₹9 lakh per MTPH (maximum ₹45 lakh).

Only new machinery and new installations are eligible. The project must be commissioned within 12 months from the date of In-Principle approval.

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Banks Providing Loans for Biomass Pellet Plant

Below are major financial institutions offering loans under MNRE-linked and renewable-energy financing schemes:

Bank / Institution	Scheme Highlights	Loan Coverage	Promoter Contribution	Tenure / Moratorium
IREDA	Biomass Pellet / Briquette / Torrefied Pellet Financing Scheme	50–70% of project cost	30%	Up to 10 years
Indian Bank	MSME Scheme for Biomass Pellet Manufacturing Units	Term loan + working capital	25%	12-month moratorium
SBI	Renewable & Biofuel Project Loan	Project finance up to 70%	30%	Tenor up to 15 years
SIDBI / CGTMSE	MSME green projects with collateral-free loans	75% (collateral-free)	25%	As per SIDBI terms
NABARD	Rural & agri-renewable infrastructure support	Refinance to banks / NBFCs	—	Variable

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Documentation Checklist

To apply for MNRE subsidy and bank financing, the following documents are required:

1. Business / Entity Documents

·      Company registration certificate, PAN, GST

·      Udyam / MSME registration

·      Identity and address proof of promoters

2. Technical & Project Documents

·      Detailed Project Report (DPR) with capacity, cost, and ROI

·      Machinery quotations and technical specifications

·      Layout drawings and civil estimates

·      Raw material availability report (biomass supply)

·      Off-take agreements or MOUs for pellet sales

3. Financial / Loan Documents

·      Bank statements, audited financials, CIBIL score

·      Collateral / mortgage details

·      Promoter’s contribution proof

4. Subsidy-Specific Documents

·      Application on BioURJA portal

·      In-Principle approval letter

·      Inspection agency certification after commissioning

·      Machinery invoices and installation photographs

·      SCADA / remote monitoring system report

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⏳ Duration and Release Terms

·      Application: Apply before commissioning via the BioURJA portal.

·      Approval: “In-Principle” approval typically issued within 60–90 days.

·      Project completion: Must be commissioned within 12 months.

·      Inspection: Conducted by SNA / SSS-NIBE before subsidy release.

·      Subsidy release: After verification, MNRE releases CFA directly to the applicant’s bank account or through the implementing agency.