"OMCs Set to Secure 300 Crore Litres of Ethanol Annually from New Plants in 8 States"

State-owned oil marketing companies (OMCs) are gearing up to secure more than 300 crore litres of ethanol annually from upcoming biofuel manufacturing facilities spread across eight states and two union territories.

The initiative, led by the OMCs Ethanol Procurement Group (OEPG), involves the issuance of an expression of interest (EOI) to attract bidders for establishing long-term off-take agreements with Dedicated Ethanol Plants (DEPs) in Tamil Nadu, Kerala, Andhra Pradesh, Telangana, Gujarat, Rajasthan, Goa, Odisha, as well as the Union Territories of Jammu & Kashmir and Ladakh.

Under the arrangement, Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) will jointly procure 301 crore litres of ethanol annually from these upcoming plants, with operations expected to commence within two years from the signing of the off-take agreement.

Bidders interested in participating in the procurement process are required to submit an affidavit committing to commissioning their proposed DEPs within two years of receiving the letter of intent (LoI) from the OMCs.

The procurement distribution is slated to be the highest in Tamil Nadu, with 97 crore litres annually, followed by Kerala (55 crore litres), Rajasthan (44 crore litres), Gujarat (33 crore litres), and Andhra Pradesh (30 crore litres).

The EOI document outlines the requirement for a Tripartite Agreement (TPA) to be signed with selected bidders, facilitating access to financing from banks or financial institutions.

Furthermore, the OMCs have introduced a marking system to incentivize the use of specific feedstocks. Corn/maize and tapioca hold the highest preference, earning 20 marks, followed by combinations of rice and corn/maize or damaged rice and corn/maize, which earn 15 marks. Sugarcane-based feedstocks or combinations with other feedstocks carry 10 marks.

Bidders opting for sugarcane-based feedstocks must ensure a consistent supply of sugarcane juice, sugar syrup, B-Heavy, and C-Heavy molasses throughout the year, along with adequate storage capacity at the plant.

The EOI is open not only to private entities but also to public sector undertakings (PSUs) interested in establishing or already in the process of setting up DEPs, provided they meet the eligibility criteria outlined in the document.

HBL