The Cabinet has given approval to a scheme promoting coal/lignite gasification projects in both government public sector undertaking (PSU) and the private sector.
The scheme, with a total outlay of Rs 85 billion, aims to incentivise coal gasification projects across three categories. For government PSUs (Category I), a provision of Rs 40.50 billion has been allocated, offering a lump-sum grant of Rs 13.50 billion or 15 per cent of capex (whichever is lower) for up to three supported projects. In Category II, which includes the private sector and government PSUs Rs 38.50 billion has been earmarked, providing a lump-sum grant of Rs 10 billion or 15 per cent of capex for each project. At least one project will follow a tariff-based bidding process. Category III involves Rs 6 billion for demonstration projects (indigenous technology) and small-scale gasification plants, offering a lump-sum grant of Rs 1 billion or 15 per cent of capex. The selection process for categories II and III will be competitive and transparent, with the grant disbursed in two equal instalments.