The Indian government has approved Rs 8,500 crore for promoting coal and lignite gasification projects, aiming to reduce chemical imports and boost energy independence.
New Delhi, Jan 24 (PTI) The government on Wednesday approved an outlay of Rs 8,500 crore as financial assistance for promoting coal, lignite gasification projects.
The government has also approved setting up of coal-to-SNG (Synthetic Natural Gas) project through a joint venture between Coal India and GAIL at an investment of Rs 13,052.81 crore and coal-to-ammonium nitrate project through a joint venture between CIL and BHEL for Rs 11,782.05 crore.
The decision is a significant step as it helps reduce import of chemicals, which can be derived through coal gasification.
The Cabinet under the chairmanship of Prime Minister Narendra Modi "approved the scheme for promotion of coal/lignite gasification projects of government PSUs and the private sector with an outlay of Rs 8,500 crore towards incentive for coal gasification projects under three categories", the coal ministry said in a statement.
The government will provide viability gap fundings to the projects to be set up by PSUs, JVs of PSUs, private sector, and R&D organisations.
"Today's Cabinet decisions relating to the coal sector will strengthen our resolve towards Aatmanirbharta," the prime minister said in a post on X.
The promotion of coal, lignite gasification projects of Public Sector Units (PSUs) and the private sector with an outlay of Rs 8,500 crore towards incentive for coal gasification projects is under three categories.
For category one it is Rs 4,050 crore, followed by Rs 3,850 crore in category two and category three is Rs 600 crore.
The coal ministry in another statement said the Cabinet Committee on Economic Affairs (CCEA) has approved the "proposal for equity investment by CIL for setting up of coal-to-SNG (Synthetic Natural Gas) Project at ECL command area through a JV of CIL and GAIL and for setting up of Coal-to-Ammonium Nitrate Project at MCL command area through a JV of CIL & BHEL".
The estimated equity investment by state-owned CIL in both these JVs will be in the range of Rs 3,651-3,800 crore, respectively.
The CCEA has approved "equity capital of Rs 1,997.08 crore... by CIL considering a debt-equity ratio of 70:30, and 51 per cent equity investment in JV company... for the proposed Coal-to-Synthetic Natural Gas" project, the statement said.
The approval has been given for equity capital of Rs 1,802.56 crore by CIL -- considering a debt-equity ratio of 70:30, and a 51 per cent equity investment in JV company for the proposed coal-to-ammonium nitrate project.
CIL will set up the two coal gasification plants with a view to achieve the target of 100 MT coal gasification by 2030 and to fulfil the country's aim of self-reliance and energy independence.
CIL has signed a Memorandum of Understanding (MOU) with GAIL for setting up coal-to-SNG project.
The coal behemoth has also signed pacts with BHEL for setting up of coal-to-ammonium nitrate project.
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