New Delhi: Announcing the successful bidders for the coal gasification Viability Gap Funding (VGF) scheme on Monday, the Ministry of Coal said that Coal India Limited and two of its joint ventures have been selected as successful bidders under Category-I and New Era Cleantech Solution Private Limited has been selected under Category-III. The two JVs of Coal India that will bag incentives from the government include the newly-instituted Bharat Coal Gasification and Chemicals Limited (BCGCL) and the CIL-GAIL JV. This announcement is significant because it marks the first financial and policy impetus from the government for coal gasification, a sector where even though policies have been place since 2020 but little has happened on the ground. It is also significant because it marks the entry of the first private player into India’s coal gasification landscape.
“The Ministry of Coal has achieved a significant milestone in its ambitious coal gasification program by announcing the Selected Applicants under Category-I and III of the Scheme… This development reinforces the government’s commitment to advancing a cleaner, more sustainable coal future for India,” said the Coal Ministry.
“This announcement marks the successful completion of the process under Categories I & III and demonstrates the growing confidence of the industry in the future of coal gasification in India,” it added.
The Ministry of Coal launched a financial incentive scheme with an outlay of Rs 8,500 crore, approved by the Cabinet for promotion of Coal/Lignite Gasification Projects, a crucial step towards India’s target of 100 million tonnes of coal gasification by 2030. “The Scheme, launched under three Categories, has garnered strong interest from industry players, with five applications received under Categories I and III,” said the ministry.
Under Category I, Rs 4,050 crores will be provided to government PSUs or JV of PSUs. A total of three projects will be supported by providing a lumpsum financial incentive of Rs 1,350 crores or 15 percent of the capex, whichever is lower, to each selected PSU’s project. Under Category II, Rs 3,850 crore has been provisioned for the private sector as well as PSUs. Successful bidders under this category have not been announced yet.
Under Category III, Rs 600 crore has been provisioned for demonstration projects (indigenous technology) and/or small-scale product-based gasification plants undertaken by both the private sector as well as PSUs to develop indigenous coal/lignite gasification technology.
“The Coal Gasification Incentive Scheme is expected to drive innovation in clean coal technologies and create thousands of new jobs, contributing significantly to India’s transition to a clean energy future. The Ministry of Coal remains committed to advancing initiatives that promote sustainable energy solutions while reducing the country’s carbon footprint, paving the way for a more environmentally responsible energy landscape in India,” it added.
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