Towards Commercial Coal Mine Financing

  • Ministry of Coal (MOC) to liberalize the coal sector in India.
  • Removing restrictions on the sale and utilization of coal.
  • Provisions for financing coal mines
  • Flexible auction terms to encourage wider participation.
  • Ministry of Coal has successfully auctioned 91 coal mines across seven tranches.
  • One key area of focus has been securing financial assistance to operationalize coal mines.
  • Industries find it difficult to obtain financial support from Banks/ Financial Institutions (FIS).
  • With the rising impetus of Environmental, Social and Governance (ESG) norms, most of the Banks/Financial Institutions are reluctant to engage in projects related to coal.
  • The Ministry conducted a ‘Stakeholder Consultation’ on “Funding of Commercial Coal Mines in India.”
  • Event was attended by coal mine allocates and senior officials from financial institutions and banks.
  • Banks have expressed their willingness to finance Coal Mines, provided project visibility and equity infusion visibility were demonstrated through detailed business plans.
  • Coal is expected to remain a primary energy source in the foreseeable future.
  • Coal Ministry requested the Department of Financial Services (DFS) to consider classifying the coal sector under the ‘Infrastructure Sector.’
  • The State Bank of India (SBI) has extended financial assistance for the development of one Commercial Coal Mine.
  • Banks/ Financial Institutions (FIS) are in the process of formulating board-approved policies to extend financial support in line with development and operationalization timelines.
  • Must consider the significant transformation of the Indian coal sector over the past four decades and the abundance of indigenous coal reserves.
Posted in Current Affairs.