The Ministry of Coal organises stakeholder consultation to promote “Funding of Commercial Coal Mines in India”. A press release on the same was issued on 26th June, 2023.
The meet focused on major concerns pertinent to 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 and requested relaxations in the same. These include high cash margin in BG issuance, stringent pre-disbursement conditions, negative outlook of coal sector in banking fraternity etc.
The Banks present during the meet expressed their willingness and assured flexibility to finance coal mines subject to demonstration of, among other things, project viability, equity infusion visibility etc. in presence of 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 Officer for coal mine financing and establish detailed policies, Banks/FIs to explore 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.
