A viability gap funding scheme worth Rs 8,500 crore has been approved by Union Cabinet for promoting coal gasification.
Total outlay of Rs 8,500 crore will be offered as financial aid for coal gasification projects under three categories.
With a Rs 4,050 crore budget, Category I focuses on government PSUs for a maximum of three projects.
A grant of Rs 1,350 crore or 15% of the project’s capital expenditure (capex), whichever is less, may be awarded to any project falling under this category.
Rs 3,850 crore is allotted to Category II, which combines government PSUs with the private sector.
Each project falling under this category would be granted Rs 1,000 crore, or 15% of capital expenditure.
Notably, in association with NITI Aayog, one project will be chosen via a tariff-based bidding procedure.
With a budget of Rs 600 crore, Category III is dedicated to demonstration projects and small-scale product-based gasification plants.
15% of the total cost, or Rs 100 crore, will be awarded to qualifying projects that produce 1500 Nm3/hr of synthetic gas and have a minimum capital expenditure of Rs 100 crore.
The authority to amend the modalities of the scheme has been granted to the Empowered Group of Secretaries (EGoS), chaired by the coal secretary.
However, overall outlay will be maintained within Rs 8,500 crore.
A transparent and competitive bidding procedure will be used to choose the entities that fall under categories II and III.
The chosen entity will get the funding in two equal installments.
