Reliance Industries Ltd has joined hands with DBS Bank India to launch a financing program for compressed biogas (CBG) plants.
The financing will enable the ecosystem development for vendor partners to aggregate agri-residue as inputs for the Reliance Compressed Biogas (CBG) production plants across India, the company said, adding that the funding structure will ensure that the logistics are designed in a way that this new stream remains competitive and achieves enhanced commercial scale.
India produces a significant amount of agricultural residue which is usually burnt in the absence of required processing infrastructure and logistical support. The agricultural residue supply chain has so far been unorganized as farmers and aggregators have not been adequately incentivized and financed.
“Reliance Industries, identifying this as an important element in their net zero road map, has plans to invest across the country to produce CBG as an alternative to imported CNG and other fossil fuels making India a prominent source of bio-fuel,” the company said, adding that though the technology for CBG has evolved, commercialization requires new infrastructure and value chain engagement involving farmers across the states.
RIL has planned to set up around 100 CBG plants over the next 5 years which would consume more than 5.5 million tonnes per annum of agricultural residue and organic waste and lead to a projected reduction of nearly 2 million tonnes of carbon dioxide emissions annually.
“The CBG industry is highly fragmented in nature and predominantly dependent on agriculture and is affected by seasonal variations. These modalities required DBS Bank India to introduce significant customizations to the standard supply chain financing model to meet the requirements of the project,” the company said.
Rajat Verma, Managing Director and Head of Institutional Banking, at DBS Bank India, said, ““India’s green energy sector, which includes solar and wind, as well as emerging areas
like biogas, will be one of the key pillars of the country’s net-zero strategy. Transition financing plays a crucial role in enabling businesses to identify and scale new technologies that can accelerate the path to decarbonization.”
Harindra K Tripathi, Head of Bio-energy Business, Reliance Industries Limited said, “Compressed Biogas plants are one of the key ways to utilize the massive organic waste that our society produces, the burning of which is one of the major contributors to air pollution. In addition to the mitigating effect on carbon emissions, the Reliance CBG plants will also contribute towards the production of Fermented Organic Manure (FOM) which will enhance soil fertility and reduce consumption of chemical fertilizers over a period.”
RIL is setting up biogas facilities at multiple locations at Uttar Pradesh by using surplus agro residue and organic waste. These facilities will be linked to a network of biogas dispensing stations operated by Reliance Jio BP.
A flagship CBG production facility has been set up in Barabanki, a city with historical significance in Uttar Pradesh. The Barabanki plant alone is expected to cut down CO2 emissions by 40,000 tonnes annually, an effect comparable to the carbon absorption of a 15,000-acre rainforest, highlighting Reliance’s commitment to spearheading India’s bioenergy transformation.
DBS Bank is renowned for its expertise in supply chain financing and goes beyond traditional banking to enable responsible solutions for large enterprises, their supplier networks as well
as small and medium businesses that empower them to streamline operations for enhanced efficiency. The bank’s extensive Asian network and deep expertise in customising sustainable solutions enable businesses to mitigate risks and seize growth opportunities.
