DBS Bank to finance Reliance's CBG projects in India
SUMMARY
Mumbai-based Reliance has outlined plans to establish approximately 100 CBG plants over the next five years.
By Shardul SharmaDBS Bank on December 13 announced the establishment of a financing programme tailored to meet the needs of Reliance Industries' compressed biogas (CBG) initiatives.
Mumbai-based Reliance has outlined plans to establish approximately 100 CBG plants over the next five years, aiming to utilise more than 5.5mn tonnes/year of agricultural residue and organic waste. This ambitious project is projected to result in a reduction of nearly 2mn tonnes/year of CO2 emissions.
The financing programme by DBS Bank is designed to support the development of an ecosystem involving vendor partners tasked with aggregating agricultural residue for use as inputs in Reliance's CBG production plants across India. The funding structure is crafted to ensure competitive logistics and facilitate the achievement of an enhanced commercial scale for this new stream of sustainable energy, the bank said.
Reliance is in the process of establishing biogas facilities at multiple locations in the state of Uttar Pradesh, leveraging surplus agricultural residue and organic waste. These facilities will be integrated into a network of biogas dispensing stations operated by Jio BP, a joint venture between Reliance and global energy major BP. Notably, a flagship CBG production facility has already been established in Barabanki, with the potential to cut down CO2 emissions by an estimated 40,000 tonnes/year, as highlighted by DBS Bank.
The move aligns with the Indian government's recent policy announcement mandating the blending of CBG in compressed natural gas (CNG) and domestic piped natural gas (PNG) segments. The policy dictates a compulsory blending obligation starting at 1% of total CNG and domestic PNG consumption in fiscal 2025-26, gradually increasing to 5% by fiscal 2028-29. This initiative is expected to stimulate demand for CBG, reduce LNG imports, promote a circular economy by utilising organic waste, and contribute to achieving net-zero emission targets.
Industry experts told Gas Pathways that this policy shift will provide a significant boost to the CBG sector, helping India reduce its reliance on costly LNG imports while fostering sustainable practices in the energy sector.
