Deferment of DCCO Rules
Date of Commencement of Commercial Operations (DCCO) refers to the planned date by which a project is expected to start generating revenue. In project loans, DCCO is critical because repayment schedules are typically aligned with the revenue generation of the project.
Rules for Deferment of DCCO
- Standard Extension Periods:
- Infrastructure Projects: DCCO can be deferred by up to 2 years from the original date specified at the time of financial closure.
- Non-Infrastructure Projects: DCCO can be deferred by up to 1 year.
- Court Case-Related Extensions: For infrastructure projects delayed due to court cases, an additional 2 years extension is allowed, making the total deferment up to 4 years.
- Delays Beyond Promoters’ Control:
- Infrastructure Projects: An additional 1 year can be provided for delays beyond the promoters’ control, making the total deferment 3 years.
- Non-Infrastructure Projects (excluding real estate): An additional 1 year can be allowed, making the total deferment 2 years.
Note: Real estate project loans are excluded from any deferment beyond the standard period.
Deferment Rules Table
| Category | Standard Deferment Period | Additional Deferment | Total Maximum Deferment | Applicable Conditions |
|---|---|---|---|---|
| Infrastructure Projects | 2 years |
1. +2 years for court cases (total 4 years). 2. +1 year for delays beyond promoters' control. |
3-4 years | Delay must be due to court cases or reasons beyond promoters' control (e.g., regulatory delays). |
| Non-Infrastructure Projects | 1 year | +1 year for delays beyond promoters' control (excluding real estate). | 2 years | Delay must be due to reasons beyond promoters' control (e.g., natural calamities, regulatory hurdles). |
| Real Estate Projects | 1 year | No additional deferment allowed. | 1 year | Only standard extension permitted. |
Examples
| Type of Project | Original DCCO | Standard Extension | Additional Extension | Revised DCCO | Reason for Delay |
|---|---|---|---|---|---|
| Highway (Infrastructure) | March 2025 | March 2027 (2 years) | +1 year (March 2028) | March 2028 | Regulatory approval delays (beyond control). |
| Power Plant (Court Case) | January 2025 | January 2027 (2 years) | +2 years (January 2029) | January 2029 | Court case over land acquisition. |
| Factory (Non-Infrastructure) | June 2025 | June 2026 (1 year) | +1 year (June 2027) | June 2027 | Fire incident causing delay. |
| Real Estate Project | April 2025 | April 2026 (1 year) | No additional extension allowed. | April 2026 | Delay in construction. |