OMCs sign purchase agreement for upcoming dedicated ethanol plants, Auto News, ET Auto
Oil marketing companies including Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Limited (HPCL) have entered into a long-term purchase agreement (LTPA) for upcoming dedicated ethanol plants across India, the government said in a press release on Wednesday.
Payment towards supply of ethanol shall be credited to escrow account maintained with the financing bank to ensure servicing of loan as per schedule, the government said.
The State Bank of India, Indian Overseas Bank and Indian Bank are part of this tripartite agreement which is designed to ensure that payment received by ethanol plants is utilised for servicing the finance extended by these banks, the government added.
The government advanced the target of achieving 20% blended ethanol by 2025, commonly known as the E20 target.
As per the E20 scenario, India requires 1,016 crore litre of ethanol to achieve the target in by FY26. Although as per the current availability, there is a deficit of approximately 650 crore of ethanol. These five projects are likely to contribute to around 23 crore litres of ethanol per annum, the government said.