India’s agriculture bank releases guidelines for $20bn food processing fund

India’s National Bank for Agriculture and Rural Development (NABARD) has announced guidelines for funding worth $20bn to make affordable credit available to agro-processing units being designated as food-parks.

The Reserve Bank of India has established the fund in NABARD, which will provide the money either directly or through consortium arrangements in association with other financing agencies.

The loan can be used by state governments, entities promoted by state / central governments, joint ventures, cooperatives, federation of cooperatives, SPVs, farmers producers organisations, corporate, companies and entrepreneurs for setting up designated food parks.

The setting up of individual food and agro processing units in the food parks will also be a part of the funding.

The food parks eligible for the loan will be the ones promoted by the Ministry of Food Processing Industries (MOFPI) and state governments and designated food processing, multi products SEZs. Other areas that have developed enabling infrastructure and designated as food park by MOFPI will also be eligible.

State governments and entities promoted by it will get loan assistance for maximum of 95% of the eligible total project outlay assessed by NABARD. All other categories will receive it for a maximum of 75% of eligible total project outlay.

NABARD chairman HK Bhanwala announced that the operational guidelines had been approved by the board.

Bhanwala said: "Affordable credit to food processing units in mega food parks (MFPs) and other designated food parks (DFPs) is a national priority. The Ministry of Food Processing Industries (MoFPI), was the guiding spirit behind this initiative."