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Governance Bytes: Funding to Northeast gas grid: Centre will provide ₹5559 Cr.

Funding to Northeast gas grid: Centre will provide ₹5559 Cr.

Approx Read Time: 5 minutes 

In News:

  • The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to provide Rs 5,559 crore viability gap funding (VGF) for building a 1,656 km gas grid in the Northeast region at a cost of Rs 9,256 crore.

News Summary:

  • The CCEA, chaired by PM Modi, has given its approval of 60% Capital Grant for setting up the North East Natural Gas Pipeline Grid to the Indradhanush Gas Grid Limited.
  • The VGF amount is 60 % of estimated project cost and will not be linked to project cost escalation.
  • The Ministry of Petroleum & Natural Gas will identify milestones for major activities for this project and link the same for releases of capital grant of the project.

Supply of the Natural Gas:

  • The North East Gas Grid will get the natural gas supply from GAIL’s Barauni – Guwahati pipeline, which is a part of Jagdishpur – Haldia and Bokaro – Dhamra Natural Gas Pipeline Project, popularly known as ‘Pradhan Mantri Urja Ganga’.

A Committee to review the project:

  • For effective monitoring of the project implementation, a Committee comprising of officials from Ministry of Petroleum & Natural Gas, Department of Expenditure, Ministry of Development of North East Region, Ministry of Environment, Forest & Climate Change, and Department of Fertilizers will be formed.
  • It would periodically review the progress in implementation of the project and take steps to smoothen out any issues in execution.

Significance of the Project:

  • The project will enhance availability of natural gas in North East and ensure uninterrupted supply of natural gas to industries, domestic consumers and for transport purposes to establish a clean fuel led economy by substituting the liquid fuels like kerosene and firewood traditionally prevalent in the region.
  • This will lead to development of industrial climate in the north-eastern region without impacting the environment and would offer better quality of life to the people in general due to use of cleaner and green fuel.
  • It will help in leveraging the hydrocarbon potential in the region.
  • It will improve quality of life, help usher a gas based economy and increase the share of natural gas in the energy mix.
  • Uninterrupted supply of LPG and other value added products can be ensured in the region which will bring energy security to the people in the area.
  • This project will boost Exploration and Production activities and connect regional gas sources with pipeline network for early monetization of natural resources in the region.

Way ahead:

  • India is the biggest emitter of greenhouse gases after the US and China and the latest move is in sync with the government’s Act East policy, with to transform the northeast region into a gateway to Southeast Asia.

About: Viability Gap Funding (VGF)

  • The Viability Gap Funding (VGF) scheme was launched in 2004 by the Indian government to provide financial support to Public-Private Partnerships.
  • Under the scheme, the government offers grant one-time or deferred, provided to support infrastructure projects that are economically justified but fall short of financial viability.

About: National East Gas Grid

  • The North East Gas Grid project is being implemented by Indradhanush Gas Grid Ltd (IGGL) under the Ministry of Petroleum and Natural Gas.
  • The total length of the pipeline is planned to be 1,656 km and will be built at estimated cost of ₹9,265 crore (Including interest during construction).
  • The Gas pipeline would cover eight states of the North-Eastern region:
    1. Arunachal Pradesh
    2. Assam
    3. Manipur
    4. Meghalaya
    5. Mizoram
    6. Nagaland
    7. Sikkim, and
    8. Tripura
  • Important cities covered: Itanagar, Dimapur, Imphal, Aizwal, Agartala, Silchar, Shillong and Gangtok.

Funding to Northeast gas grid


Funding to Northeast gas grid

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