Section 4 in The Energy Conservation (Partial Risk Guarantee Fund for Energy Efficiency) Rules, 2016
4. Operation of Fund.
(1)The Fund shall give a guarantee for a maximum fifty percent of the loan, only principal amount actually disbursed, provided by the participating financial institution and in case of default, the fund shall -(a)cover the first loss subject to maximum of ten percent of the total guaranteed amount;(b)cover the remaining default outstanding principal amount actually disbursed amount on paripassu basis upto the maximum guaranteed amount.(2)The implementing agency shall finalise the percentage of guarantee for each guarantee facility.(3)The participating financial institution shall take guarantee from the Partial Risk Guarantee Fund for Energy Efficiency before disbursement of loan to the borrower that is energy service company subject to payment of guarantee fees.(4)The guarantee shall not exceed rupees ten crore per project or fifty percent of loan amount, whichever is less.(5)The maximum tenure of the guarantee shall be five years from the date of first disbursement of the energy efficiency loan or the last date of the operational period of Partial Risk Guarantee Fund for Energy Efficiency, whichever is earlier.(6)Under the Partial Risk Guarantee Fund for Energy Efficiency, only individual project guarantee shall be given initially and subsequently, based on the experience, the supervisory committee may extend it to portfolio guarantees after approval of portfolio guarantee rules by the Ministry of Power.(7)Each eligible project shall fulfil the conditions that the support under Partial Risk Guarantee Fund for Energy Efficiency shall be for the government buildings, private buildings having commercial or multistorey residential accommodations, municipalities, small and medium enterprises and industry.(8)Each eligible project shall meet the following objectives, namely:-(a)seek to achieve demonstrable energy savings and mitigation in emissions of greenhouse gases;(b)propose a viable method to monitor and verify energy and greenhouse gas emission savings;(c)be a new project, not refinancing existing projects or any outstanding obligations of the eligible borrower;(d)use viable technology and be developed with competent energy audit or feasibility studies; and(e)project shall be implemented by Bureau empanelled energy service company on performance contracting mode, where there is a defined agreement which link payment to certain level of energy savings.(9)The following projects are not eligible for Partial Risk Guarantee Fund for Energy Efficiency, namely:-(a)any project in respect of which performance risks are additionally covered under a scheme operated or administered by deposit insurance and credit guarantee corporation or the Reserve Bank of India, to the extent they are so covered;(b)any project in respect of which performance risks are additionally covered by Government or by any general insurer or any other person or association of persons carrying on the business of insurance, guarantee or indemnity, to the extent they are so covered;(c)any project, which does not conform to or is in any way inconsistent with the provisions of any law or with any directives or instructions issued by the Central Government or the Reserve Bank of India, which may, for the time being, be in force;(d)any project proposal by energy service company which has not repaid any portion of the amount due to a participating financial institution for a guarantee invoked under the Partial Risk Guarantee Fund for Energy Efficiency or under scheme mentioned under clause (a) or (b) or (c);(e)any project covering performance risks under any kind of State Government or Central Government beneficiary scheme; and(f)any defaulter listed by Credit Information Bureau (India) Limited or Reserve Bank of India.
