The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal of Coal India Limited to invest in a coal-to-SNG (synthetic natural gas) project in a joint venture with GAIL at the mines of its subsidiary Eastern Coalfields Limited in Bengal.

The Rs 13052-crore syngas project will come up at Sonepur Bazari Area of Eastern Coalfields in Burdwan district of Bengal.

The CCEA also approved another investment by Coal India in a coal-to-ammonium nitrate project in a joint venture with Bhel at Mahanadi Coalfields in Odisha.

The project at an investment of Rs 11,782.05 crore will be set up at Jharsaguda in Odisha. The estimated equity investment by state-owned CIL in both these JVs will be in the range of Rs 3,651-3,800 crore.

CIL will set up the two coal gasification plants with a view to achieving the target of 100MT coal gasification by 2030.

The government on Wednesday also approved an outlay of Rs 8,500 crore as financial assistance for promoting coal, and lignite gasification projects.

The government will provide viability gap funding to the projects to be set up by PSUs, JVs of PSUs, private sector, and R&D organisations.

The incentives will come under three categories.

For category one it is Rs 4,050 crore, followed by Rs 3,850 crore in category two and category three is Rs 600 crore.