SPV submits Detailed Project Report (DPR) to bank for evaluation along with all required documents, and also primary and collateral security as may be requested by the bank. The bank may mortgage all assets of the SPV including the land parcel on which food park is established, as primary security. Although this practice of mortgaging of complete land parcel (including leasable area) does not hamper functioning of the Food Park, it may act as a deterrent to units coming up in the food park. It may be noted that units coming up in the Food Park may avail assistance under ‘Scheme for Setting up New Food Processing Unit’ of Andhra Pradesh Food Processing Policy 2015-2020. It is also mandatory for the units to obtain term loan sanction from bank along with appraisal report, while applying for grant. Under the ‘Scheme for Setting up New Food Processing Unit’, units may avail investment subsidy of 25% of the cost of Plant & Machinery and technical civil works, subject to a maximum of Rs.5.00 crores along with interest subvention at 7 per cent will be paid to the Bank/FI directly against the term loan sanctioned by it, subject to a maximum of Rs.2 crore per project or actual interest accured on term loan, whichever is less, for a period of 5 years from the date of commercial production. In this context, bank may be hesitant to provide term loan to the unit coming up in a food park, considering the fact that the unit is being established on an encumbered property. In view of the above, Andhra Pradesh Food Processing Society requested the banks including NABARD, not to insist on mortgaging the leasable plot area while sanctioning term loan to SPVs of Mega and Integrated Food Parks.
SPV submits Detailed Project Report (DPR) to bank for evaluation along with all required documents, and also primary and collateral security as may be requested by the bank. The bank may mortgage all assets of the SPV including the land parcel on which food park is established, as primary security. Although this practice of mortgaging of complete land parcel (including leasable area) does not hamper functioning of the Food Park, it may act as a deterrent to units coming up in the food park. It may be noted that units coming up in the Food Park may avail assistance under ‘Scheme for Setting up New Food Processing Unit’ of Andhra Pradesh Food Processing Policy 2015-2020. It is also mandatory for the units to obtain term loan sanction from bank along with appraisal report, while applying for grant. Under the ‘Scheme for Setting up New Food Processing Unit’, units may avail investment subsidy of 25% of the cost of Plant & Machinery and technical civil works, subject to a maximum of Rs.5.00 crores along with interest subvention at 7 per cent will be paid to the Bank/FI directly against the term loan sanctioned by it, subject to a maximum of Rs.2 crore per project or actual interest accured on term loan, whichever is less, for a period of 5 years from the date of commercial production. In this context, bank may be hesitant to provide term loan to the unit coming up in a food park, considering the fact that the unit is being established on an encumbered property. In view of the above, Andhra Pradesh Food Processing Society requested the banks including NABARD, not to insist on mortgaging the leasable plot area while sanctioning term loan to SPVs of Mega and Integrated Food Parks.
202nd%20SLBC%20Agenda.docx