Cost, capital availability next challenge for coal gasification
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓The government is backing coal gasification with a ₹37,500-crore incentive programme to lower upfront costs.
- ✓However, experts said the next challenge is the cost and availability of capital.
- ✓"Government is addressing the capital-cost gap.
Story at a Glance
- Category
- MARKET
- Reported By
- Business Line
- Reading Speed
- 3 Minute(s)
- Market Focus
- India Economy
Even as the government is strongly backing coal gasification, with a ₹37,500-crore incentive programme addressing upfront capital-cost, analysts and market players emphasise on a dedicated financing and risk-sharing architecture to make it market ready.
Coal gasification converts coal into downstream products such as methanol, ammonium nitrate, Synthetic Natural Gas (SNG) and fertilisers etc, which can help reduce imports of natural gas, methanol and fertilisers.
Industry sources said that coal gasification projects have large upfront capital requirements, long gestation periods and multiple layers of risk such as technology performance with Indian high-ash coal, project execution, downstream product pricing and offtake, ramp-up risk, carbon management and the cost and tenure of debt.
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