financing-for-compressed-biogas-plants-to-be-brought-under-priority-sector-lending

Context: The Government is in the process of including Compressed Biogas under Priority Sector Lending(PSL). It will provide ease in the financing of CBG Plants. 

More on news:

  • Recently, the Minister of Petroleum and Natural Gases made this announcement during inauguration of CBG Plant at Namakkal in Tamil Nadu and CNG Fuel Stations.
  • Initiative will help in providing environment friendly gaseous fuel from natural sources in Tamil Nadu.
  • Also, Central Financial Assistance or Subsidy for setting up CBG plants has been extended to 2020-21 to promote new projects.

Potential of India’s Oil and Gas sector

  • The Minister said that there is immense potential in India's Oil and Gas sector and the projects that have been initiated in the recent past would go a long way in ensuring India’s energy security. 
  • Biogas production is growing steadily, as more people are setting up biogas plants to produce biogas. 

About SATAT:

  • The 'SATAT' (Sustainable Alternative Towards Affordable Transportation) scheme on CBG was launched on 1.10.2018 which envisages targeting production of 15 MMT of CBG from 5000 plants by 2023. 
  • The Government of India has taken various enabling steps to ensure the success of the SATAT scheme. 
  • Oil Marketing Companies have offered long term pricing on CBG to make projects bankable and have agreed to execute long term agreements on CBG.

Compressed Biogas:

  • Bio-gas is produced through a process of anaerobic decomposition from waste / biomass sources like agriculture residue, cattle dung, sugarcane press mud, municipal solid waste, sewage treatment plant waste, etc. 
  • After purification, it is compressed and called CBG, which has pure methane content of over 90%.
  • Compressed Biogas is  similar to the commercially available natural gas in its composition and energy potential.
  • CBG can be used as an alternative, renewable automotive fuel.
  • CBG has the potential to replace CNG in automotive, industrial and commercial uses in the coming years.

Advantages:

  • Waste management, reduction in carbon emissions and pollution.
  • Additional revenue source for farmers.
  • Boost to entrepreneurship, rural economy and employment.

 

Priority Sector Lending:

  • Priority Sector Lending is an important role given by the (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.. 
  • This is essentially meant for an all round development of the economy as opposed to focusing only on the financial sector.

Priority Sector includes the following categories:

  1. Agriculture
  2. Micro, Small and Medium Enterprises
  3. Export Credit
  4. Education
  5. Housing
  6. Social Infrastructure
  7. Renewable Energy
  8. Others


Source: https://pib.gov.in/newsite/PrintRelease.aspx?relid=209681

Image Source: Orissadiary.com