India considers offering interest subsidies for loans to green steel projects

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India considers offering interest subsidies for loans to green steel projects

Notification 30 Jul 2024 04:13 PM IST Steel Orbis

The Indian government is working on an initiative under which financial institutions and lenders would charge lower interest rates when issuing borrowed funds for capital-intensive green steel projects, government sources said on Monday, July 29.

The sources provided an example, stating that the effective rate may be decided upon slightly lower if the rate of interest for lending money to any green steel project came out to be 10%.

The government's option to subsidise the reduced interest rate is reportedly also being considered, added the sources.However, they added a condition indicating that multiple ministerial permissions and the involvement of all financial institutions would be required before the scheme could be implemented.

The Ministry of Steel has stated that, while a conventional steel mill with a 1 million metric tonne per year capacity would typically require a capital investment of $1 billion, a similar capacity green steel mill would require an investment of $2-2.5 billion and would require some financial support in the form of interest subvention to make it appealing to investors, according to sources.

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India considers offering interest subsidies for loans to green steel projects

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