Cabinet greenlights Rs 8,500 crore scheme to propel coal, lignite gasification projects in move toward clean energy
Jan 24, 2024
New Delhi [India], January 24 : The Cabinet, chaired by Prime Minister Narendra Modi, has given its nod to a scheme aimed at promoting Coal/ Lignite Gasification Projects. With an outlay of Rs 8,500 crore, the initiative is designed to incentivize coal gasification projects under three distinct categories.
According to a cabinet press release, financial assistance of Rs 8,500 crore will be allocated for coal gasification projects, distributed across three categories.
In Category I, a substantial Rs 4,050 crore has been earmarked for Government Public Sector Undertakings (PSUs). Up to three projects will receive support through a lump-sum grant of Rs 1,350 crore or 15 per cent of the capital expenditure (capex), whichever is lower.
In Category II, Rs 3,850 crore has been set aside for both private sector entities and Government PSUs. Each project will be eligible for a lump-sum grant of Rs 1,000 crore or 15 per cent of capex, whichever is lower.
Additionally, at least one project will be subjected to a tariff-based bidding process, with criteria formulated in consultation with NITI Aayog.
In category III a dedicated fund of Rs 600 crore is allocated for demonstration projects involving indigenous technology and/or small-scale product-based Gasification Plants.
The selected entity, with a minimum capex of Rs 100 Crore and a minimum production of 1500 Nm3/hr Syn gas, will receive a lump-sum grant of Rs 100 crore or 15 per cent of capex, whichever is lower.
Entities falling under Category II and III will undergo a competitive and transparent bidding process for selection.
The grant will be disbursed in two equal instalments to the selected entities.
The Empowered Group of Secretaries (EGoS) chaired by Secretary Coal will be fully empowered to make any necessary changes in the scheme's modalities, ensuring that the overall financial outlay remains within the stipulated Rs 8,500 crore.
Manish Desai, Principal Director General of Press Information Bureau (PIB), emphasized the significance of the Cabinet's decision through a post on X, "#Cabinet approves scheme for promotion of Coal/Lignite Gasification Projects of Government PSUs and Private Sector towards incentive for coal gasification projects #cabinetdecisions".
