Talcher Fertilizers Ties Finances for Coal Gasification-Based Urea Project

Bhubaneswar: Talcher Fertilizers Ltd (TFL), a joint venture of state-owned gas, fertiliser and coal firms, has tied up finances for a Rs 13,277.21 crore urea manufacturing plant that will use feedstock from the gasification of coal.

Managing Director of TFL Sachchidanand Yadav said a consortium of lenders led by State Bank of India (SBI) will provide Rs 9,560 crore debt for the project.

The consortium was selected following a book-building process conducted by SBI CAPS on behalf of TFL. Punjab National Bank, Union Bank of India, Indian Bank, Bank of Maharashtra, Indian Overseas Bank, EXIM Bank, Bank of India and Canara Bank are the other members of the lender’s consortium.

TFL has been mandated by the government to revive the erstwhile Talcher plant of FCIL by setting up a new greenfield coal gasification-based urea plant with an installed capacity of 12.7 lakh tonne per annum at an estimated project cost of Rs 13,277 crore.

Of the project cost, Rs 9,560 crore will be borrowed and the balance will be funded by promoters in form of equity.

The debt has been secured after the Cabinet Committee on Economic Affairs (CCEA) had in April 2021 approved the exclusive subsidy policy for urea produced by TFL through coal gasification route, a release of the company stated.

The technology used for implementation of the Talcher project is being used for the first time in India and is a significant step towards ensuring energy security of the country through harnessing the vast coal reserves of the country in a manner which is more environment friendly than direct fired coal projects.

Coal from blocks operated by Coal India Ltd will be partially oxidated by air, oxygen, steam or carbon dioxide under controlled conditions to produce a fuel gas. This will be used as feedstock to produce urea at the Talcher plant.

The project shall also provide impetus to the economy of Odisha in particular and eastern India in general thereby also propelling India towards Atma Nirbharta (self-reliance), said Yadav.