Jun 26: As part of its commitment to assisting India in meeting its energy demands and actively pursuing Prime Minister Shri Narendra Modi’s vision of Atmanirbhar Bharat, the Ministry of Coal organised stakeholder consultation in New Delhi to promote “Funding of Commercial Coal Mines in India”.The event was chaired by Shri M. Nagaraju, Additional Secretary and Nominated Authority, Ministry of Coal and attended by Coal Mine Allocatees and senior officials from Banks/Financial Institutions (FIs).
Shri M. Nagaraju inaugurated the meeting commenting on the global industry scenario and outlook of the coal sector in India, emphasizing the imminent need of financing coal mines. He stated that out of 87 auctioned mines to date, only a few have been successful in receiving financing support and urged the Banks/FIs to expedite the financing in the coal sector.
Presentations were made by Shri Ajitesh Kumar, Director, Ministry of Coal on the commercial coal mine auctions process and extant enablers for funding commercial coal mines and Shri Ashok Sharma, CGM, State Bank of India (PFSBU) on SBI’s commercial coal funding policy. Dr Sanjay Kumar, Director, of the Department of Financial Services (DFS) also addressed the meeting and showcased the support of DFS, the Ministry of Finance to facilitate coal mine funding.
The meeting focused on major concerns pertaining to the financing of commercial coal mining and solicited feedback/suggestions from all stakeholders. Given coal mining is capital intensive, the Coal Mine allocatees highlighted possible bottlenecks being faced in availing financial assistance (high cash margin in BG issuance, stringent pre-disbursement conditions, negative outlook of the coal sector in the banking fraternity etc.) and requested relaxations in the same. The Banks expressed their willingness and assured flexibility to finance coal mines subject to demonstration of, among other things, project viability, equity infusion visibility etc. in the presence of a detailed business plan.
Based on the feedback, the Nominated Authority suggested some enablers to facilitate ease of coal financing in India such as Banks/FIs may designate Nodal Officers for coal mine financing and establishing detailed policies, Banks/FIs exploring participation in initial stages (Vesting Order/EC/FC and other approvals), and Coal Mine Allocatees to formulate detailed business plans showcasing project viability before approaching banks for financing needs.
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