Government has launched a Scheme with financial outlay of Rs. 8,500 crore to provide viability gap funding (VGF) to promote Coal/Lignite Gasification Projects for both PSUs and the private sector. The approved scheme covers projects under following three categories –

Category I, with a provision of Rs. 4,050 crore, is for Government PSUs. They can submit proposals for funding assistance, and three selected projects will receive a maximum grant of Rs. 1,350 crore or 15% of project cost, whichever is lower.

Category II, with Rs. 3,850 crore, is available to both private sector and government PSUs with a maximum grant of Rs. 1,000 crore or 15% of project cost, whichever is lower.

Category III, with Rs.  600 crore for demonstration or small-scale projects with maximum outlay per project of Rs. 100 crore or 15% of project cost, whichever is lower.

The Ministry of Coal has floated Request for Proposals (RFPs) for seeking applications for setting up of Coal/Lignite Gasification projects under all three categories, as mentioned above. RFPs provide a time frame of 5 years from the date of execution of agreement of financial incentive scheme.

As per the timelines, the date of submission of bid is 11.11.2024 and the date of execution of Agreement is 13.05.2025. Hence, the commercial scale Coal Gasification Projects are expected by May 2030 in the country.