Coal India Limited has taken a major step toward expanding its renewable energy portfolio by approving a corporate guarantee of up to ₹3,160 crore for its subsidiary’s large-scale solar project. The decision was cleared during a recent board meeting and aims to support the development of an 875 MW solar photovoltaic (PV) power plant under CIL Rajasthan Akshay Urja Limited (CRAUL).
The approved guarantee is a 100% corporate backing that will enable CRAUL to secure debt financing for the capital expenditure required to build the solar project. This financial support ensures that the subsidiary can raise funds more easily from lenders, reducing risks associated with project financing. However, it also creates a potential liability for Coal India, as the company would be responsible for up to ₹3,160 crore in case of any default by the subsidiary.
CRAUL is a joint venture between Coal India Limited and Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL). In this partnership, Coal India holds a dominant 74% stake, while RRVUNL owns the remaining 26%. The structure reflects Coal India’s strong control and commitment to the project, while also aligning with state-level power generation efforts in Rajasthan.
The 875 MW solar project is part of Coal India’s broader strategy to diversify its energy mix and reduce dependence on coal-based operations. As India moves toward clean energy adoption, the company is gradually positioning itself as a key player in the renewable energy sector. This initiative also supports the country’s larger goal of increasing non-fossil fuel capacity and promoting sustainable power generation.
The solar plant is expected to be developed at a large solar park in Rajasthan, which has emerged as one of India’s leading states for solar energy development due to its high solar irradiation and availability of land. The project will contribute significantly to the national grid and help meet rising electricity demand with cleaner energy sources.
Overall, the approval of this guarantee highlights Coal India’s transition from a traditional coal mining company to a diversified energy enterprise. By backing large renewable projects like this, the company is not only supporting India’s green energy targets but also ensuring its own long-term sustainability in a rapidly changing energy landscape.
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