Published on October 17th, 2018 | by Saurabh0
Indian Coal Mining Companies Plan $1.6 Billion Solar Investment
October 17th, 2018 by Saurabh
The world’s largest coal mining company, Coal India Limited (CIL), and India’s largest lignite mining company, NLC India Limited (NIL), have announced a joint venture to set up 3 gigawatts of solar power capacity. Apart from the solar power capacity, the two companies will also cooperate on setting up 2 gigawatts of coal-based power capacity.
The two companies have signed a memorandum of understanding to move ahead with this plan. Coal India issued a press release in which the emphasis is clearly on the solar power expansion plans. CIL states that it has been mandated by the Government of India — its largest and majority shareholder — to become a Net Zero Energy company. Even before this joint venture announcement, CIL had announced aggressive plans to set up large-scale solar power projects across the country.
CIL and NIL have announced plans to invest Rs 12,000 crore (over $1.6 billion) to set up the solar power capacity. This means an investment of Rs 4 crore per megawatt (over $530,000 per megawatt). The joint venture will invest 70% of the capital investment and pick up 30% debt from banks and/or financial institutions.
The projects will be developed at barren and reclaimed land owned by Coal India as well as at other locations across the country where land for such projects is available. No specific locations have been announced by either companies. NIL would likely be the one that develops the actual projects as it has experience in implementation of large-scale solar power projects.
CIL had earlier announced plans to set up 1 gigawatt of capacity, including 200 megawatts of capacity in the state of Madhya Pradesh, and 600 megawatts of capacity in three other states. It is unclear whether CIL would go ahead with the earlier plan in addition to the JV with NIL, or the two shall remain exclusive, or the JV plans would replace the earlier plan.
NIL has had experience in bidding for large-scale projects, and according to Mercom India, the company has already commissioned 440 megawatts of solar power projects, with an additional 909 megawatts under construction.
A subsidiary of CIL — Singareni Collieries Company Limited (SCCL) — had earlier this year announced plans to set up 550 megawatts solar power capacity to power its mining operations. The Solar Energy Corporation of India (SECI) has already issued a tender on behalf of SCCL for 150 megawatt capacity.