The coal ministry on Friday said it is reviewing the 15% clause in viability gap funding (VGF) in coal gasification projects.
Rethinking the viability gap funding model
Under the VGF scheme, 15% of the capital expenditure of a project or any specified maximum amount is funded by the government. In the first category, for government projects, projects receive a grant of up to Rs 1,350 crore, or 15% of the project cost, whichever is lower, is funded. In the second category, for private and public sector companies, grants are capped at Rs 1,000 crore, or 15% of the project cost, whichever is lower, whereas in the the third category, for small-scale projects, Rs 100 crore, or 15% of the cost, whichever is lower, is funded.
Cross-Ministry collaboration for by-product utilisation
Speaking during a roadshow on coal gasification in Mumbai, additional coal secretary Rupinder Brar said the coal ministry is in talks with the Ministry of Petroleum and Natural Gas (MoPNG) on the usage of bi-products such as ethanol, methanol and others. She, however, refused to say whether there will be any revision in the cap. “We are in talks with MoPNG because it is the domain ministry for the utilisation of products including ethanol and methanol,” she added.
The coal ministry promotes gasification through a financial incentive scheme of Rs 8,500 crore, with the goal of achieving 100 million tonne of coal gasification by 2030. The ministry is looking to organise roadshows in cities such as Hyderabad and select international locations on coal gasification in surface and underground technologies.
“It is a great business opportunity, given that India has billions of dollars of coal. So it’s important for us and the industry to join hands, to leverage the resources,” Brar added.