DEPARTMENT OF STORAGE & MARKETING GUJARAT REGIONAL OFFICE AHMEDABAD

NABARD WAREHOUSING SCHEME Financing for warehousing, storage and marketing infrastructure – accorded top priority Emerging, high value business Expected business – 50,000 cr in the next five years Warehouse Infrastructure Fund (WIF) created with Rs cr – with the approval of GoI and RBI NABARD Warehousing Scheme (NWS) formulated for utilization of WIF NWS was approved by the Board of Directors (BoD) of NABARD in its meeting on 23 September 2013

Salient features Eligible institutions –State Governments & Agencies Owned/ Sponsored by State Govts. Panchayati Raj Institutions - by way of loans through respective State Governments (on the lines of RIDF). –Agencies owned/sponsored by Government of India, Cooperatives & Cooperative Federations including Milk marketing federations, Federations of Farmers’ Collectives, APMCs, State Level Boards, Apex Marketing Boards/Bodies, SPVs set up under PPP mode, involving Farmers’ Producers’ Organisations (FPOs) and individual entrepreneurs, corporates/ companies, etc., by way of direct loans

Salient features - contd Activities covered –projects involving creation of storage infrastructure for agricultural and allied produce including construction of –Warehouses, Silos, Cold storage/other cold chain activities like Controlled Atmosphere(CA) storage, reefer vans, bulk coolers, individually quick frozen units, chilling/freezing infrastructure, etc. –Modernization/improvement of the existing storage infrastructure projects will be considered if it leads to scientific/additional storage –Projects to conform to norms of WDRA + should also give an undertaking for obtaining accreditation /registration from WDRA on completion of the infrastructure.

Procedure for sanction of loans Head Office - MoS –Upto Rs. 100 crore - Business Proposals Sanctioning Committee (BPSC) of NABARD –Above Rs. 100 crore - Top Management Committee (TMC) of NABARD. –(The BPSC will first consider the proposal involving sanctions in excess of Rs. 100 crore and recommend the same for consideration of the Top Management Committee) –CGM/OIC of the ROs concerned, where projects are being implemented if required will be a special invitee to the committee for sanction of loans to private sectors. –Delegation to ROs, in due course –Time limit prescribed for disposal – 30 days

Project Cost The eligible project outlay include –cost of site development, construction of main and ancillary structures, internal roads, drainage, machinery & equipment, etc. –No loan would be provided for purchase of land. –However, cost of land, not exceeding 10% of the project cost, may be reckoned towards borrower’s contribution

Terms of lending Type of borrowerMax quantum of loan Tenure of loan Rate of interest State/Central Govt. owned/Assisted Entities/ Cooperatives, Federations of Coops., Federations of Farmers’ Collectives/SPVs set up under PPP mode, etc., without mandate Primary Agricultural Cooperative Societies (PACS)/Coop. Marketing Societies (CMS) or similar institutions 95% of TFO 07PLR + Risk premium More than 7 years PLR + Risk premium + Tenor premium* Private companies / Entrepreneurs75 % of TFO 07 yearsPLR + Risk premium More than 7 years PLR + Risk premium + Tenor premium* *Tenor premium:Upto 7 yrs : nil ; Upto 8 yrs : 0.25%; 8 to 10 yrs : 0.30%; > 10 yrs: 0.50%

Terms of lending - contd Security – Loans will be secured by both primary and Collateral security All receivables should be routed through escrow account An evaluation fee of 0.5% of project cost (max Rs. 10 lakh) for private sector Adequate and comprehensive insurance Repayment – Grace period of max 2 yrs, during which, interest has to be serviced Interest payable on quarterly rests Prudential norms and exposure norms will apply Monitoring as per Credit Monitoring Manual Due diligence including analysing through CIBIL reports, mortgaging with central registering authority etc

Private sector applications – Rating & RoI Rating on a scale of 100 based on –Financials (50), Security (30), Management (10) and Compliance (10) Sl.NoMarks obtainedRatingInterest rate 190 and aboveAAA plus (prime)PLR 280 to 89AAAPLR + 25 bps 370 to 79AAPLR + 50 bps 460 to 69APLR + 75 bps

Aspects to be borne in mind Large size projects, preferred Ease of liquidity of security – determining factor for credit decision and rating –Eg., Receivables or FD lien, preferred over land and building All warehouses funded, will have to be accreditated No take over of existing loans Cold storages – same guidelines Operational guidelines including Risk rating – are strictly for internal use – not to be shared

Action points Letter to APMCs and District level Milk Unions – issued by RO – to be followed up for submission of proposals Discuss with CCBs & PACS and facilitate submission of proposals Oral and personal enquiries - Apprise salient features of the scheme keep RO informed on a regular basis

Thank you