Government to set up sovereign fund for acquisition of coal assets abroad

The government proposes to create a sovereign fund for acquisition of coal assets overseas on the lines of sovereign wealth fund being operated by some countries for overseas acquisitions, coal minister Sripraksh Jaisawal said today.

Though Coal India Ltd (CIL) has surplus resources for investing outside, the scale of operations makes it important for the government to offer support in acquiring very large assets abroad, both for economic and political reasons, he said.

The minister was addressing a round table conference organised by the Confederation of Indian Industry (CII) on the issues regarding overseas coal acquisition in New Delhi.

He said the acquisition of coal properties abroad has assumed significance in recent times in view of the domestic production constraints and the growing demand for coal by different consuming sectors, particularly, steel and power. It is an important issue in the present circumstances as the country is unable to meet its energy requirements, with the resources available domestically, he added.

''We are facing tough challenges in meeting the energy needs of the country. The nation's energy requirements are envisaged to increase to about 1667-2077 million tonnes by 2031-32 as per the projections made in the Integrated Energy Policy Committee Report. The overall import dependence of energy in 2031-32 is projected to be in the range of 58-67 per cent. This kind of growth in energy demand and the increasing gap between domestic supply and demand, will make it imperative to secure energy supplies through imports,'' he said.

The minister said that energy security is an important area and strategies have to be worked out for ensuring uninterrupted supplies of energy for achieving the projected growth in economy. From energy security point of view, he said, the government has been encouraging both public and private sector companies to acquire energy assets abroad. While there have been successful stories in both oil and coal acquisitions, the minister said, ''We need to be more aggressive in acquiring energy assets abroad.''