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

Coal India Ltd. (CIL) has approved providing a corporate guarantee of up to INR 3,160 crore to its subsidiary CIL Rajasthan Akshay Urja Ltd.(CRAUL) for financing a large-scale solar power project.

The decision was taken by the CIL Board at a recently held meeting. CRAUL, a joint venture between CIL and Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RRVUNL), is developing an 875 MW solar PV project. CIL holds a 74 percent stake, while RRVUNL owns the remaining 26 percent.

The approved guarantee will cover 100 percent of the debt requirement, enabling CRAUL to raise funds for the project’s capital expenditure. The transaction has been classified as being conducted at arm’s length, given CIL’s majority ownership in the venture.

From a financial standpoint, the move creates a contingent liability for CIL, limited to INR 3,160 crore, which would arise only in case of default by CRAUL on its debt obligations.

The development reflects CIL’s continued push into renewable energy as it diversifies beyond coal and strengthens its presence in India’s fast-growing solar sector.