RBI Guidelines Propel Growth: 50 CBG Projects Commissioned

As of November 1, 2023, fifty CBG projects, supported by both equity from project proponents and debt support from financial institutions, have been successfully commissioned.

December 15, 2023. By Abha Rustagi

Reserve Bank of India (RBI) has classified Compressed Bio-Gas (CBG) projects under agricultural infrastructure as per its guidelines. This strategic move has led to a surge in priority sector lending for agriculture infrastructure, with major banks such as Canara Bank, State Bank of India, Punjab National Bank, Bank of Baroda, and others introducing exclusive loan products/schemes for financing CBG projects.

As of November 1, 2023, fifty CBG projects, supported by both equity from project proponents and debt support from financial institutions, have been successfully commissioned. These projects boast a total production capacity of about 300 tonnes per day.

This comprehensive information was shared by the Minister of State in the Ministry of Petroleum and Natural Gas, Rameswar Teli, in a written reply in Lok Sabha.

The government's proactive approach extends beyond banking support, with various measures taken on a Pan India basis. Central Financial Assistance is provided to all types of CBG/biogas plants under the Umbrella Scheme of the National Bio Energy Programme of the Ministry of New and Renewable Energy (MNRE).

Additional Central Assistance is allocated for Municipal Solid Waste (MSW) based CBG plants under the Swachh Bharat Mission Urban 2.0 by the Ministry of Housing and Urban Affairs.

Further, incentives include Market Development Assistance for Fermented Organic Manure produced from CBG projects, biomass aggregation machinery support under the Sub Mission on Agricultural Mechanization and Crop Residue Management scheme, and policy guidelines for co-mingling of CBG with Natural Gas in City Gas Distribution (CGD) networks.

The government has also introduced excise duty exemption on the amount of GST paid on CBG contained in blended Compressed Natural Gas (CNG). Moreover, there are plans for the mandatory blending of CBG in CNG (Transport) and PNG (Domestic) segments of the CGD sector, starting from the fiscal year 2025-26.

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RBI Guidelines

Reserve Bank of India

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Compressed natural gas (CNG)