What lenders review in a CBG project
A lender evaluates whether the promoter, feedstock, technology, site, EPC plan, offtake, approvals, project cost, and cash flow can support the proposed debt. A strong DPR connects technical evidence with a realistic construction and repayment model.
- Promoter background, equity source, net worth, and project structure
- Feedstock survey, contracts, seasonality, logistics, and delivered cost
- Land, utilities, statutory approvals, technology, and reference projects
- Offtake route, gas quality, transport, and commercial agreements
- Project cost quotations, schedule, contingencies, cash flow, and sensitivities
Debt-equity and EMI
Debt-equity defines how much of project cost is funded by the lender versus the promoter. Typical CBG project finance covers 70-75% of project cost with no or minimal collateral, at an indicative interest of around 10.5% — often reducing to about 8-9% once subsidy-linked interest support applies — and includes a moratorium of up to 2 years during which only interest is serviced. A standard EMI calculation assumes the full principal is drawn and repaid through equal monthly instalments, so treat it as a screening model.
- Typical CBG debt: 70-75% of project cost with no or minimal collateral
- Indicative interest around 10.5%, often reducing to 8-9% with subsidy-linked support
- Moratorium of up to 2 years with interest-only payments before principal begins
- Model promoter equity separately from debt
- Include fees, IDC, cost overrun, and working capital
- Use the lender's actual repayment and moratorium terms
What DSCR means
Debt Service Coverage Ratio compares cash available for debt service with scheduled principal and interest. A ratio above 1.0 means the modelled cash flow exceeds debt service for that period, but lender definitions and required minimum or average ratios vary.
- Calculate DSCR for every repayment period
- Show minimum and average DSCR
- Test lower output, lower price, higher feedstock cost, delay, and higher interest
- Avoid depending on uncontracted by-product revenue to meet repayment
Using the loan and DSCR calculator
The free tool estimates project debt, promoter equity, monthly EMI, annual debt service, total interest, and an indicative DSCR from an EBITDA or CFADS proxy. Use it to compare assumptions before preparing the lender-specific debt schedule and financial model. The default proxy of ₹12.04 Cr reflects the illustrative 6 TPD annual profit at the revised ₹105/kg CBG price, where the base unit economics already include ₹30/kg of bank or finance cost within ₹65/kg of total considered cost.
- Adjust project cost and debt percentage
- Compare interest-rate and tenure scenarios
- Use a conservative annual cash-flow proxy
- Take the assumptions into a DPR and funding-readiness review