Bio-CBG, Climate Finance and the Road to Bankability

The session opened with a sharp framing from Mr. K K Gupta: with the mandatory CBG blending obligation now live from FY26 and Budget 2026-27 having notified excise relief on the CBG portion of blended CNG, the policy scaffolding is largely in place — but the 35% average plant utilisation across the operational 190 plants tells its own story about the gap between sanctioned capacity and bankable performance. Mr. Kotikalapudi Eswar walked the room through how lenders are currently reading CBG term sheets, where the comfort comes from the OMC offtake under SATAT, but where banks are still pricing in feedstock volatility, working capital stress and the absence of a long-tenor pricing escalator. The consensus from the banking side was that 70:30 debt-equity is achievable only when the promoter brings demonstrated feedstock tie-ups and a credible O&M plan — not on the strength of the LOI alone. Dr. Pawan Singh and Mr. Pawan Agarwal brought the developer lens, detailing why projects in UP, Punjab and Maharashtra are stalling at the financial closure stage despite signed offtake — civil cost overruns, delays in gas grid connectivity, and the mismatch between CBIC notifications and ground-level GST treatment on digestate and slurry. R. Balakrishnan was direct on the equity side: pure-play CBG IRRs at current capex benchmarks are not clearing the 18% threshold most domestic PE desks want, which is why blended structures using NABARD refinance and the SIDBI green line are becoming the default rather than the exception. Mr. Shantanu Chaturvedi closed the substantive discussion on where climate capital actually intersects with CBG. He laid out how the RBI's Green Deposits Framework and the draft disclosure rules are beginning to compress pricing for projects that can produce credible Scope 1 avoidance data, and why developers in the Delhi NCR and Mumbai catchments should be building MRV systems into the DPR stage rather than retrofitting them for the first ESG audit. The working takeaway for the room: bankability in 2026 will be decided less by SATAT registration and more by the quality of feedstock contracts, MRV readiness, and the promoter's willingness to underwrite the first 18 months of ramp-up.