FCC

Coal Ministry urges coal's infrastructure classification

2023-10-30

The coal ministry announced that they had asked the Department of Financial Services (DFS) to consider classifying coal under the infrastructure sector. They stated that this move would enable the financing of commercial coal mines. The ministry explained that this reclassification would permit banks and financial institutions to create more effective policies to meet the growing demands of the coal sector within specific timeframes. They emphasised that coal is expected to remain a primary energy source in the foreseeable future.

In a statement, the ministry revealed, "Banks have shown their readiness to fund coal mines, given that detailed business plans demonstrate project viability and visibility of equity infusion."

The government also sought responses from companies owning coal mines to determine the essential financing needed for mine development and operation, along with the necessary timelines to meet these requirements. This collected information was shared with banks and financial institutions to efficiently address the industry demands.

The coal ministry is currently implementing various reforms to make the sector more appealing to investors. One crucial aspect of their focus has been obtaining financial assistance for the operationalisation of coal mines. The ministry acknowledged that industries faced challenges in securing financial support from banks and financial institutions.

Due to the growing emphasis on environmental, social, and governance (ESG) norms, many banks and financial institutions were hesitant to engage in coal-related projects. Despite this, the ministry stated that these institutions were in the process of formulating board-approved policies to provide financial support in alignment with development and operationalisation schedules.