SBI plans policy to lend to coal miners ahead of landmark auctions

Lenders are also wary about sustained demand for coal, which is seen globally as a dirty fuel but is still the biggest source for electricity generation in India.

State Bank of India is creating a policy to lend to coal miners before landmark auctions that would end decades of state monopoly on the fuel, according to a person with knowledge of the matter.

Long-term offtake contracts assuring demand will be central to any lending decision, the person said, asking not to be identified before terms are finalised. The nation’s biggest bank would prefer a loan tenor closer to five years, the person added.

The planned policy suggests SBI is open to providing some of the financing required to put 41 coal mines with a combined annual production capacity