The stakeholder consultation served as a platform for dialogue and collaboration to address the challenges faced in financing commercial coal mines.

The Ministry of Coal, in line with its commitment to support India’s energy requirements and Prime Minister Narendra Modi’s vision of Atmanirbhar Bharat, recently organized a stakeholder consultation in New Delhi. The objective of the consultation was to promote the “Funding of Commercial Coal Mines in India.” The event was chaired by M. Nagaraju, the Additional Secretary and Nominated Authority of the Ministry of Coal, and attended by Coal Mine Allocates as well as senior officials from Banks and Financial Institutions (FIs).

During the meeting, M. Nagaraju highlighted the global industry scenario and the outlook of the coal sector in India. He emphasized the urgent need for financing coal mines, pointing out that out of the 87 auctioned mines to date, only a few have successfully received financial support. He urged the Banks and FIs to expedite the financing process in the coal sector.

Various presentations were made during the consultation. Ajitesh Kumar, Director of the Ministry of Coal, discussed the commercial coal mine auction process and the existing enablers for funding commercial coal mines. Ashok Sharma, Chief General Manager of the State Bank of India (PFSBU), presented SBI’s commercial coal funding policy. Dr. Sanjay Kumar, Director of the Department of Financial Services (DFS), also addressed the meeting and highlighted the support provided by the DFS, Ministry of Finance, to facilitate coal mine funding.

The consultation primarily focused on the major concerns related to financing commercial coal mining and sought feedback and suggestions from all stakeholders. Given the capital-intensive nature of coal mining, Coal Mine Allocates highlighted the potential bottlenecks faced in obtaining financial assistance. These included high cash margins in Bank Guarantee issuance, stringent pre-disbursement conditions, and the negative perception of the coal sector among banks. They requested relaxation in these areas. The Banks expressed their willingness to finance coal mines and assured flexibility, subject to the demonstration of project viability, equity infusion visibility, and the submission of a detailed business plan.

Taking into account the feedback received, the Nominated Authority proposed several measures to facilitate easier financing of coal projects in India. These included designating Nodal Officers for coal mine financing within Banks and FIs, establishing detailed policies for coal mine financing, encouraging Banks and FIs to participate in the initial stages of project development, such as obtaining Vesting Orders, Environmental Clearances, and Forest Clearances, and requiring Coal Mine Allocates to formulate detailed business plans that demonstrate project viability before approaching banks for financing.

The stakeholder consultation served as a platform for dialogue and collaboration between the Ministry of Coal, Coal Mine Allocates, Banks, and FIs, to address the challenges faced in financing commercial coal mines. It underscored the importance of promoting investment and financial support in the coal sector to meet India’s energy requirements and advance the vision of Atmanirbhar Bharat.