Save
Print
[Ferro-Alloys.com] India's state-controlled mining firm Coal India (CIL) has formed a joint venture with NLC India, a state-controlled lignite producer and utility, to set up thermal and solar power assets with a combined capacity of 5GW in the country.
The JV was formed 21 months after the two companies signed an initial agreement to develop 2GW of thermal power and 3GW of solar power capacity. The October 2018 agreement set a deadline of 15 months for completion of solar projects while a five-year timeline was agreed for the thermal power projects. Reasons for the delay are not known.
CIL and NLC India are listed on the Bombay stock exchange and are under the administrative control of the federal coal ministry. The 50:50 joint venture will tap the expertise of the two companies to expand in the power sector.
Details of the investment were not shared in the two companies' communications to stock exchanges last week. CIL has cash reserves of about 230bn rupees ($3.08bn) and it can deploy some of that to fund these projects.
Indian public sector companies in the energy space are seeking to diversify into related sectors. State-controlled power utility NTPC said in May it would form a JV company with public oil explorer ONGC to set up renewable energy projects.
CIL's leading subsidiary Mahanadi Coalfields said in June it planned to invest Rs113bn to build a 1.6GW thermal power plant in the eastern state of Odisha.
The interest of public firms in thermal power projects holds significance against the backdrop of a decline in thermal generation expansion from the private sector.
Indian utilities added 6.8GW of thermal power capacity during the 2019-20 fiscal year ending on 31 March, enabling potential growth in coal consumption. This lifted India's total thermal generation capacity to 231GW as of 31 March. But private sector companies like Adani Power and Tata Power have stopped investing in new greenfield thermal capacity as they focus on developing renewable power.
Despite avoiding new greenfield thermal generation projects, India's largest private utility Adani Power has been open to acquiring existing thermal assets. The company said last month it would acquire a 49pc stake in the 1.74GW Odisha Power Generation coal-fired power project from US-based AES for Rs10.2bn ($135mn), the firm's first thermal power investment in the east India state.
Source: Argusmedia
Copyright © 2013 Ferro-Alloys.Com. All Rights Reserved. Without permission, any unit and individual shall not copy or reprint!
- [Editor:kangmingfei]
Daily News
Research
Magazine
Company Database
Customized Database
Conferences
Advertisement
Trade
Tell Us What You Think