BHEL, Coal India to Invest ₹25,000 Crore in Odisha Coal Gasification Project

Bharat Heavy Electricals Limited (BHEL) and Coal India Limited (CIL) are set to jointly invest ₹25,000 crore in a large-scale coal gasification project in Odisha, marking a major step in India’s efforts to diversify the use of coal beyond conventional power generation.

The announcement was made by Union Coal and Mines Minister G. Kishan Reddy during an event held in Jharsuguda in the presence of Prime Minister Narendra Modi and President Droupadi Murmu. The project is expected to play a significant role in strengthening India’s industrial ecosystem while creating new economic opportunities in eastern India.

Coal gasification is a technology that converts coal into synthesis gas, commonly known as syngas. This gas can be used as a feedstock for producing fertilisers, chemicals, synthetic fuels and several other industrial products. The initiative is expected to support domestic manufacturing and reduce India’s dependence on imports of key industrial raw materials.

According to the government, the Odisha project will contribute to the development of a more diversified and value-added coal economy. By converting coal into higher-value products, the project aims to maximise the economic potential of India’s vast coal reserves while supporting long-term energy security and industrial growth.

The investment is also expected to generate substantial employment opportunities in Odisha, both during the construction phase and after commercial operations begin. The project could stimulate the growth of ancillary industries, logistics networks and supporting infrastructure in the region.

Minister Kishan Reddy highlighted that coal gasification remains a strategic priority for the Central Government. He noted that the government has earmarked ₹46,000 crore to support coal gasification projects across the country as part of a broader initiative to promote cleaner and more efficient utilisation of coal resources.

Industry experts believe that coal gasification projects will play an important role in India’s transition towards greater resource efficiency while supporting sectors such as fertilisers, petrochemicals and advanced manufacturing. The BHEL-Coal India partnership is expected to become one of the country’s flagship projects in this emerging segment.