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India's CBG Projects Gain Momentum with Supportive Financial Measures

The alignment of CBG projects with agriculture infrastructure, coupled with the proactive measures taken by banks and government bodies, marks a significant step towards realizing India's commitment to sustainable energy.

Shivam Dwivedi
India's CBG Projects Gain Momentum with Supportive Financial Measures (Photo Source: Pixabay)
India's CBG Projects Gain Momentum with Supportive Financial Measures (Photo Source: Pixabay)

The Reserve Bank of India (RBI) has classified Compressed Bio-Gas (CBG) projects as agriculture infrastructure as of November 1, 2023, aligning them with priority sector lending. This strategic move has prompted major banks to extend financial support to CBG projects, resulting in the commissioning of fifty projects nationwide, each boasting a total production capacity of approximately 300 tonnes per day.

Leading Banks Introduce Exclusive Schemes

In a concerted effort to propel the CBG sector, prominent banks such as Canara Bank, State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Union Bank of India, Indian Bank, Punjab & Sind Bank, and UCO Bank have rolled out exclusive loan products and schemes tailored to finance CBG projects. This initiative is set to further accelerate the growth and development of the CBG industry.

State-Level Committees Drive SATAT Implementation

To ensure effective implementation and monitoring of the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative, State Level Committees have been established in key states including Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Maharashtra, Punjab, Tripura, Uttar Pradesh, and West Bengal. These committees play a pivotal role in overseeing the successful execution of CBG projects at the regional level.

The government's commitment to fostering the growth of CBG projects extends beyond the financial sector. Initiatives such as Central Financial Assistance under the National Bio Energy Programme of the Ministry of New and Renewable Energy, additional support for Municipal Solid Waste (MSW) based CBG plants through the Swachh Bharat Mission Urban 2.0, and Market Development Assistance for Fermented Organic Manure underscore the holistic approach towards promoting sustainable energy practices.

Incentives and Regulations Propel CBG Sector

The government has introduced a range of incentives and regulations aimed at propelling the CBG sector. These include excise duty exemptions on GST-paid compressed biogas, mandatory blending of CBG in CNG and PNG segments of the City Gas Distribution sector from the financial year 2025-26, and schemes facilitating financial assistance for CBG producers to procure biomass aggregation machinery.

These measures aim to create a conducive environment for the widespread adoption of CBG as a clean and renewable energy source. The multifaceted support system in place positions the CBG sector for continued growth and prominence in the country's energy landscape.

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