Reliance to invest ₹43,000 crore in Andhra Pradesh for coal-to-gas plant

Reliance Industries plans to invest around ₹43,000 crore ($4.59 billion) in an underground coal-to-gas plant in Andhra Pradesh, with the project carrying the potential to attract investments of up to ₹2.7 lakh crore over 30 years and generate 40,000 jobs, according to a draft memorandum of understanding.

The agreement, dated November 12, is between Reliance and the Andhra Pradesh Economic Development Board (APEDB), which will act as the nodal agency for facilitating the project, including coordination with state departments on land, water and power access and liaison with central ministries.

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The integrated coal gasification complex will be developed in two phases, subject to regulatory approvals. The first phase will involve an estimated investment of ₹3,000 crore and cover exploration, seismic data acquisition, geological assessments and pilot demonstrations to establish the project's technical and commercial feasibility.

The second phase, involving an initial investment of around ₹40,000 crore, will begin after successful trials, completion of the first phase and submission of a detailed project report, according to the agreement.

The project is expected to create 5,000 direct and 35,000 indirect jobs in the state. If completed, it would rank among India's largest coal gasification projects.

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Reliance secured the Chintalpudi Sector A1 and Recherla coal blocks in Andhra Pradesh's Eluru district in April, under India's first commercial coal mine auctions allowing underground conversion of coal into gas.

The investment comes as India steps up efforts to reduce dependence on imported fuels and chemicals through coal gasification. The coal ministry has set a target of achieving annual coal gasification capacity of 100 million tonnes by 2030. In May, the government announced a ₹37,500 crore incentive programme covering up to 20% of plant and machinery costs.

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Andhra Pradesh has emerged as a major investment destination, with Google committing $15 billion towards an artificial intelligence hub and Reliance and its joint venture partners planning another $11 billion in data centre capacity. South Korean automaker Kia has also announced plans to invest $2 billion in an additional manufacturing facility in the state.

(With Reuters inputs)