Reliance Industries is set to embark on a significant industrial undertaking, planning an investment of approximately ₹43,000 crore (around $4.59 billion) into an underground coal-to-gas plant in Andhra Pradesh. This ambitious project, detailed in a draft memorandum of understanding (MoU), holds the potential to attract further investments reaching up to ₹2.7 lakh crore over three decades and is projected to generate 40,000 jobs within the state.
The agreement, dated November 12, establishes a partnership between Reliance and the Andhra Pradesh Economic Development Board (APEDB). The APEDB will serve as the primary facilitator, coordinating with state government departments for essential resources like land, water, and power access, and liaising with central ministries to streamline the project's development.
Phased Development and Job Creation
The integrated coal gasification complex is slated for development in two distinct phases, contingent upon receiving all necessary regulatory approvals. The initial phase will involve an estimated investment of ₹3,000 crore, focusing on critical preparatory work. This includes exploration, acquisition of seismic data, comprehensive geological assessments, and pilot demonstrations to ascertain both the technical and commercial viability of the project.
Following the successful completion of the first phase, including trials and submission of a detailed project report, the second phase will commence. This stage will see an initial investment of roughly ₹40,000 crore. Upon its full completion, the facility is anticipated to create 5,000 direct jobs and an additional 35,000 indirect employment opportunities, positioning it among India's largest coal gasification projects.
Strategic Importance and National Goals
Reliance secured the Chintalpudi Sector A1 and Recherla coal blocks in Andhra Pradesh's Eluru district in April. These allocations were made under India's pioneering commercial coal mine auctions, which explicitly permit the underground conversion of coal into gas. This strategic move aligns with India's broader national objective to reduce its reliance on imported fuels and chemicals through advanced coal gasification technologies.
The Union Coal Ministry has established a target to achieve an annual coal gasification capacity of 100 million tonnes by the year 2030. To support such large-scale industrial endeavors, the government announced a substantial incentive program in May, offering up to ₹37,500 crore, covering as much as 20% of the plant and machinery costs for eligible projects.
Andhra Pradesh: A Growing Investment Hub
Andhra Pradesh has increasingly emerged as a favored destination for significant industrial investments. Beyond Reliance's coal gasification plans, the state has attracted other major players. Google has committed $15 billion towards establishing an artificial intelligence hub, while Reliance and its joint venture partners are planning an additional $11 billion investment in data center infrastructure. South Korean automaker Kia has also announced plans for a $2 billion investment to set up a second manufacturing facility in the state, further solidifying Andhra Pradesh's industrial growth trajectory.