Market

It converts voluntary demand into a legal obligation on CGD entities, which improves offtake certainty - but the volumes are consumption-linked targets, not a guarantee that supply exists. Petroleum Minister Hardeep Singh Puri stated the CBO would encourage investment of around 37,500 crore rupees and facilitate 750 CBG projects by 2028-29, which is a projection rather than a commitment.

Anchor the forecast to the local CGD entity's actual CNG and PNG volume times the CBO percentage, plus any industrial thermal demand nearby - not to national totals. As an illustration, a 10 TPD plant over 330 days at the administered price implies roughly 33 crore rupees of annual CBG revenue.

Realistic, location-specific feedstock data and contracts; conservative yield and recovery assumptions; a full approvals map; sensitivity analysis; and vendor performance guarantees. Lenders discount optimistic Napier yields and overstated utilisation, so a DPR built on brochure figures is discounted before it is read.

Per Business Standard (2 April 2025), Reliance New Energy's first CBG plant at Kanigiri, Andhra Pradesh - 100 tonnes, 475 acres, Napier-based - is being established with an investment of 139 crore rupees, and is the first of a planned 500 plants totalling 65,000 crore. It is a captive-feedstock, large-integrated model, not a template for a standalone 5 TPD plant.

Retail-outlet versus pipeline-injection offtake; captive versus aggregated feedstock; and whether digestate and CO2 are monetised at all. Small retail-model plants can cost roughly double the pipeline-injection model for the same capacity, so the offtake decision is a capex decision too.

Recent deals show structured debt - an 836 crore rupee facility for nine plants under the IOC-GPS Renewables joint venture - and mezzanine funding of 50 crore from an asset manager, alongside green bonds, blended finance and viability-gap-style support. The capital base is widening beyond plain bank debt.

Large players - Reliance, Adani Total Gas, GPS Renewables, EverEnviro, and IOC and IGL joint ventures - are building multi-plant portfolios, which favours standardised replicable designs and creates eventual consolidation potential. Portfolio counts are planned rather than operational, so read them as pipeline, not fleet.

Feedstock is often paid for well ahead of CBG and FOM receipts, and subsidy timing is uncertain, so undersized working capital distresses otherwise viable plants. On the contract side, insist on guaranteed methane recovery, guaranteed specific power consumption and a guaranteed outlet specification, each with a test protocol and a penalty attached.