FINANCING COLD

STORAGE

Objective of the session

At the end of the session the
participants will be able to:
1.Explain the need and importance
of Cold storages.
2.Explain NABARD recommendation
about unit size of Cold Storage and
two types of schemes available for
financing Cold storage units.
3.Explain details of General scheme
of NABARD on cold storage.
4.Explain details of Central subsidy
scheme of NABARD on cold storage.

FINANCING COLD
STORAGE

Introduction:
India is the largest producer of
fruits and second largest producer
of vegetable in the world. However,
post harvest losses are to the
extent of 25% to 30% as these
commodities are perishable. This
has resulted in lower return to
agriculturist, forcing them to go for
distress sale. Consumer is also at
loss as he gets deteriorated quality
of fruits and vegetables in the
absence of cold chain from farm to
point of sale.

FINANCING COLD
STORAGE
NABARD has come out with a
scheme for establishment of cold
storage units. Cold storage units
can be used to store either a single
commodity
or
multiple
commodities. Depending upon the
entrepreneurs financial health, he
can plan to store his own produce
or rent it out. Ideal ratio would be
70:30 where 70 is hiring and 30
would be own use. NABARD, after a
care full study has found that ,
economic size of the cold storage

FINANCING COLD
STORAGE
A .General Scheme
Eligible Institutions : Commercial
banks, RRBs, SCBs and SCARDBs
Eligible Borrowers: Individuals,
group of individuals, partnership
and
proprietary
firms,
Co-op
Societies,
Public
and
Private
limited companies.
Land required: 2 acres, (elevated
dry land free from water logging
and
with
hard
rocky
soil
formation)
Location: near to crop cultivation
area and consumption center. Well

FINANCING COLD
STORAGE
Eligible Items of Finance:
a. Cost of land
b. Land levelling, fencing, formation of
approach road, drainage etc.
c . Civil work of main clod storage building, rack
provision. Drying shed, machinery room, store
for consumable, generator room, office, security
room etc.
d. Insulation of main cold storage building
e. Machineries for cooling ,air circulation,
grading, loading and weighing
f. DG Set
G. Water supply arrangement
h. Pollution control and waste disposal
equipment.
i. Miscellaneous fixed assets including office
furniture
j. Preliminary and preoperative expenses

FINANCING COLD
STORAGE

ct cost: Rs150 lacs

in: 15% to25% of the project cost
of Interest: As per Bank policy subject to RBI guidelin
yment : up to 9 years including grace period of one ye
rity: As per Bank policy subject to RBI guidelines
ance Rate: 90%

FINANCING COLD
STORAGE
Other terms ans conditions :
1. The Entrepreneur should be
financially sound and his back
ground
on
educational/technical/agricultural/b
usiness
experience
should
be
thoroughly looked into.
2.
Project
Report
with
all
parameters
of
Financial
and
technical details should be obtained
3. All the items as per check list
and Dos and Donts of NABARD
scheme should be fulfilled.

FINANCING COLD
STORAGE
B Capital Subsidy Scheme for
construction/Modernization/Expan
sion of Cold storage & Godowns
Eligible Institutions : Commercial
banks, RRBs SCBs and SCARDBs
and ADFCs( At Bangalore, Chennai
an Hyderabad)
Eligible Borrowers:, partnership
firms ,Co-op Societies
pvt and
public ltd companies, APMCs,
Marketing Boards and State Ago
Industries Corporations.

FINANCING COLD
STORAGE
Project cost :Depending upon the
capacity, technology used for cold
storage/ godown on the basis of
actuals/estimates/invoice
of
machineries and equipments.
Margin: 15% to 25%
Type of Technology: Preference to be
given for modern technology/design
and energy saving devices and
systems.

FINANCING COLD
STORAGE
Quantum of Subsidy: Subsidy is available in
only in states/ UTs/Area where there are no
rent control of cold storage units and there
are no restriction imposed on these units.
Subsidy is available @ Rs.1000/- per MT
capacity of the cold storage / godown unit
subject to a ceiling of 25% of project cost.
For calculating MT capacity of the unit
conversion factor of 3.4 cubic meter per MT
or 129 Cubic Feet per MT can be assumed.
Overall ceiling of subsidy will be Rs.50lacs per
beneficiary even if the size of the unit
exceeds 5000 MT capacity. Subsidy will be
kept as reserve fund and treated as back- end
subsidy.

FINANCING COLD
STORAGE
Other terms and conditions:
1. The Entrepreneur should be
financially
sound
and
his
background
on
educational/technical/agricultural/b
usiness
experience
should
be
thoroughly looked into.
2.
Project
Report
with
all
parameters
of
Financial
and
technical details should be obtained
3.All the items as per check list and
Dos and Donts of NABARD scheme
should be fulfilled.