NEW DELHI: Public sector power major NTPC Ltd emerged as the only company to submit applications in the second round of the Rs 37,500 crore coal and lignite gasification incentive scheme.The coal ministry said in a statement on Tuesday that NTPC has proposed to produce urea and methanol dimethyl ether (DME). In the first round, the ministry had received seven applications from five companies, including NTPC, Adani Enterprises, Gallantt Ispat, Shyam Sel and Power, and Talcher Fertilisers.The Union Cabinet had approved the scheme in May to accelerate the development of surface coal and lignite gasification projects in the country. Coal ministry officials said the aim is to encourage wider industry participation, attract investments and accelerate the adoption of coal gasification technologies to achieve the national target of 100 million tonnes of gasification capacity by 2030.With no private sector company participating in the second round, experts said financial incentives need to be complemented with credit guarantees, proven technologies and standardised modular designs to build a pipeline of commercially viable projects.“Viability-gap funding alone may not be sufficient. Even commercially sound projects can struggle to secure financing because lenders remain cautious about technology, construction and operating risks, particularly where domestic commercial precedents are limited,” said Atanu Mukherjee, CEO, Dastur Energy, which has been closely involved in coal gasification policy and commercialisation discussions with the coal ministry and Niti Aayog.“One important step would be to complement existing incentives with a govt-supported partial credit guarantee mechanism. By sharing a defined portion of lenders’ risks, while ensuring rigorous project appraisal and adequate sponsor participation, such a framework could improve access to debt, lower financing costs and encourage greater private investment,” he added.
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Mukherjee also emphasised the need to assimilate proven technologies and adapt them to India’s high-ash coal, while standardising modular designs to enable faster and wider commercial implementation.“Each successful project should build operating experience, reduce risks and improve the economics of subsequent investments. Ultimately, the success of India’s coal gasification programme should be measured not simply by the number of applications or projects sanctioned, but by how effectively we create a fleet of commercially successful projects that can attract investment and be replicated at progressively lower costs and risks,” Mukherjee said.Govt on Tuesday also launched the third round of the scheme, providing another opportunity for public and private sector companies to submit proposals for setting up gasification projects.
