The Union Cabinet has approved Rs 8,500 crore financial incentive scheme for coal gasification projects.

In the first category, Rs 4,050 crore has been provisioned for public sector utilities (PSUs) in which up to three projects will be supported by providing a lump sum grant of Rs 1,350 crore or 15 per cent of capex, whichever is lower.

In the second category, Rs 3,850 crore has been earmarked for both government and private sector projects in which the lump sum grant of Rs 1,000 crore or 15 per cent of capex, whichever is lower, is provided for each project.
At least one project will be bid out on a tariff-based bidding process and its criteria will be designed in consultation with NITI Aayog, a government statement said.

“The coal sector is working on the direction of Prime Minister Narendra Modi to gasify 100 million tonnes of coal by 2030. Accordingly, The National Mission for Gasification envisions the adoption of indigenous technologies for the production of chemical products and their derivatives,” Union Coal and Mines Minister Prahlad Joshi said.