‘Coal gasification business to get VGF scheme in 3 months’

livemint.com:

NEW DELHI : The Centre is likely to roll out the much-anticipated viability gap funding (VGF) scheme for coal gasification in the next two to three months, said the union minister for parliamentary affairs, coal and mines Pralhad Joshi. In an interview, the minister said the proposal for VGF support worth ₹6,000 crore has been approved by the expenditure finance committee (ECF). “In principle, finance ministry has allocated around ₹6,000 crore.

The plan for executing the scheme has been finalized. The expenditure finance committee has also approved the proposal," he said. “This scheme may come up in another two to three months," he said, adding that the proposal would have to be sent for cabinet approval.

Noting that coal gasification has so far been successful in countries where coal has low ash content, Joshi said that given that the ash content in the domestic coal is high, the government aims to make gasification viable and “create a success story" with fiscal support. India has been making efforts to gasify coal with high ash content and this scheme will give the government the opportunity to promote gasification in large scale commercial projects. Along with providing support to both public and private sector companies for coal gasification, the minister said that a portion of the ₹6,000 crore would be earmarked for smaller players which plan to take up gasification.

“Our plan is to have at least five to six large (gasification) plants through this VGF support," he said. Under the scheme, about 50% of the VGF support may be provided to a concerned project in the form of an upfront payment while the rest may be given on completion of the project. The move to provide VGF support, which has been in the works for the