Cabinet Approves New Scheme For Coal & Lignite “Gasification Projects”

The new scheme with an outlay of Rs.8,500 crore is meant to incentive for coal gasification projects of Government PSUs and Private Sector under three categories.

The quest for sustainable energy generation to help achieve India’s INDC targets is gaining pace. What is being marked as a major development in this direction, the Central Cabinet chaired by the  Prime Minister Narendra Modi approved a new scheme for the promotion of Coal/Lignite Gasification Projects. This is scheme is meant for the projects of Government PSUs and Private Sector with an outlay of Rs.8,500 crore towards incentive for coal gasification projects under three categories.

In category I, Rs.4,050 crore has been provisioned for Government PSUs in which upto 3 projects will be supported by providing lump-sum grant of Rs.1,350 crore or 15% of capex, whichever is lower.

In category II, Rs.3,850 crore provisioned for private sector as well as Government PSUs in which lump-sum grant of Rs.1,000 crore or 15% of capex, whichever is lower provided for each project. At least one project will be bid out on tariff-based bidding process and its criteria will be designed in consultation with NITI Aayog.

In category III, Rs.600 crore is provisioned for demonstration Projects (indigenous technology) and/or small-scale product-based Gasification Plants under which lump-sum grant of Rs.100 crore or 15% of capex, whichever is lower. This inventive will be given to the selected entity who will have a minimum Capex of Rs. 100 Crore and minimum production of 1500 Nm3/hr Syn gas.

The official statement from the Government held that the selection of entities under category II and III shall be carried out through a competitive and transparent bidding process.

The Government said that the grant will be paid to the selected entity in two equal instalments. Also, EGoS chaired by Secretary Coal shall be fully empowered to make any changes required in the modalities of the scheme subject to the condition that overall financial outlay remain within Rs.8,500 crore.

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