New Delhi: In line with its diversification plan, Coal India Limited (CIL) has announced the formation of two wholly-owned subsidiaries for undertaking solar PV manufacturing and renewable energy (RE) projects. In a regulatory filing to the stock exchanges on Friday, Coal India said, "… Coal India has incorporated two wholly owned subsidiaries viz. CIL Solar PV Limited for manufacturing of solar value Chain (Ingot-wafer-Cell Module) and CIL Navikarniya Urja Limited for renewable energy on date."
At a meeting held on December 24, 2020, the Board of Directors at Coal India had approved an expansive and decisive diversification plan for the state-run company which has historically functioned as a coal miner. The plan is a step towards preparing Coal India for the time when coal would exit India's energy mix. Although the government has categorically said on several public platforms that coal will continue to be a major source of energy for India for several decades, there is increasing pressure from the global community to declare a net-zero target for India.
A day after the Board of Directors at CIL had accorded its approval to the formation of two new subsidiaries on February 11, CIL Chairman and Managing Director Pramod Agrawal had told investors during a conference call on February 12 that the company will be keen on inviting partners to the special purpose vehicles (SPVs) formed for pursuing solar PV manufacturing and RE projects. "In most of the diversification projects which we are thinking or we are exploring, we are not going to take any technology risk or too much of capital risk, what we are proposing that we will form an SPV get all the clearances then offers a to some partner who can come along with his technology and who can invest most of the money, so from the side Coal India the capital investment will be very minimal in the sense that we will acquire land and may be provide infrastructure beyond that we are not going to do much."
Agrawal had also said that the company was planning on spending Rs 400-500 crore on the diversification businesses.
The government has been planning to transform state-run Coal India Ltd (CIL) and NLC India Ltd (NLCIL) from coal companies to energy companies. According to the Ministry of Coal, a total of 117 projects have been planned under the diversification strategy. This includes 26 projects in new business areas entailing an investment of Rs 1,41,931 crore, 19 clean coal technology projects worth Rs 31,140 crore and 72 coal mining projects with an estimated investment of Rs 73,002 crore. The overall investment totals to Rs 2.46 lakh crore.