Govt to make coal available for coal gasification projects at subsidised rates: Coal Secretary

New Delhi: Coal will be made available for coal gasification projects at subsidised rates, almost the same as it is made available to the power sector, said Coal Secretary Amrit Lal Meena at an industry interaction meeting organised by the Ministry of Coal in Hyderabad on Friday on ways to promote coal, and lignite gasification projects across the country. “If you don’t own a coal mine, Coal India and SCCL have assured that they will provide a long-term coal linkage to you for your entire gasification requirement… 10 years, 15 years, 20 years. And this coal will be available almost at the same rate at which it is being made available to the power sector, which means subsidised coal. Otherwise, for other sectors of the economy, like cement, steel, coal is made available at a premium,” said Meena.

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He added that for those potential investors who own a coal mine, the government has already provided incentives in the form of a rebate of 50 percent in revenue-sharing. Even though the government announced its intention to achieve 100 MT of coal gasification by 2030 at least three years ago, projects had not taken off on the ground for the lack of coal availability and technological challenges in gasification of high-ash coal that is widely available in India. However, with increased coal production, coal can now be made available for gasification.

‘De-coaled land will be made available by CIL, SCCL, NLCIL for coal gasification’

Stressing that the government intends to take up coal gasification projects on high priority, the Coal Secretary said that state-run PSUs like Coal India Limited (CIL), Singareni Collieries Company Limited (SCCL) and Neyveli Lignite Corporation of India Limited (NLCIL) will make their de-coaled land available for coal gasification projects on a long-term lease.

“There are three things necessary for investing in this sector — finance, raw material availability and land availability. To address the issue of viability, a VGF of Rs 1,000 crore will be provided to private players. As far as land availability is concerned, Coal India, SCCL and Neyveli Lignite Corporation have de-coaled land which will be made available for coal gasification projects on long-term lease basis. And regarding coal availability, if you own a coal mine and you use this coal for gasification, you get a 50 percent rebate on revenue-sharing,” the Secretary told investors.

“As far as finance is concerned, all banks and financial institutions, including REC Limited, have agreed to finance coal gasification projects,” he added. He urged investors to consider participating in the new initiative of coal gasification.

Coal gasification VGF scheme

The Centre has recently approved schemes for the promotion of coal and lignite gasification under which the private sector and public sector undertakings have been envisaged to take up new projects for setting up coal and lignite gasification projects, he told reporters.

In January, the government approved an outlay of Rs 8,500 crore as financial assistance for promoting coal, lignite gasification projects.

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