Coal Gasification: Cabinet Approves Rs 8,500 Cr Scheme

The Cabinet has approved an incentive scheme with an outlay of Rs.8,500 crore, for the promotion of coal or lignite gasification projects of Government PSUs and the private sector.

As per the press release dated January 24, 2024, there would be three categories for the grant of financial assistance under the scheme. In the first category, Rs.4,050 crore out of the total amount allocated is set aside for Government PSUs. Assistance in the form of a lump-sum grant of Rs.350 crore or 15% capex (whichever is lower) would be provided to up to three projects.

An amount of Rs.3,850 crore has been allocated for both the private sector and Government PSUs. Under this category, a lump-sum grant of Rs.1,000 crore or 15% capex (whichever is lower) would be provided to each project. It is specified that at least one of the projects selected under this category will be bid out on a tariff-based bidding process and its criteria will be designed in consultation with NITI Aayog.

In the last category, an amount of Rs.600 crore has been allocated for demonstration projects (indigenous technology) and/ or small-scale product-based gasification plants. Only entities with a minimum capex of Rs.100 crore and minimum production of 1500 Nm3/hr Syn gas will be eligible for the lump-sum grant of Rs.100 crore or 15% capex (whichever is lower).

The press release states that the grant paid to selected entities would be in two equal instalments. Further, the selection of entities under the second and third categories would be done through a “competitive and transparent bidding process”.