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Coal India Clears INR 3,160 Crore Guarantee for 875 MW Solar Project in Rajasthan

Coal India Ltd. (CIL) has approved a corporate guarantee of up to Rs3,160 crore to facilitate financing for a large-scale solar power project being developed by its subsidiary, CIL Rajasthan Akshay Urja Ltd. (CRAUL).

The decision, cleared by CIL’s board, will enable CRAUL to secure debt funding for its 875 MW solar PV project in Rajasthan. CRAUL is a joint venture between CIL and Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RRVUNL), with CIL holding a 74% stake and RRVUNL owning the remaining 26%.

The approved guarantee will cover the entire debt component required for the project, helping the subsidiary raise capital for its planned investments. As per the company, the transaction has been treated as an arm’s length arrangement due to CIL’s majority ownership in the venture.

From a financial perspective, the guarantee represents a contingent liability for CIL, capped at Rs3,160 crore, which would only materialize in the event of a default by CRAUL on its repayment obligations.

This development highlights Coal India’s ongoing efforts to diversify its energy portfolio beyond coal and strengthen its footprint in the renewable energy space, particularly in India’s rapidly expanding solar sector.