IOC, NPCIL to join hands for nuclear projects
Mumbai   02-Jun-2010

Country's largest oil marketing company IndianOil (IOC) will participate in greenfield nuclear projects being planned by Nuclear Power Corporation of India (NP­CIL). Boards of both PSUs have given in-principle approval to IOC's participation in the projects.

IOC chairman BM Bansal confirmed the development. He told Financial Chronicle on Tuesday that the two companies are expected to sign a joint venture agreement in next two-three months. NPCIL is likely to hold the majority 51 per cent stake in the joint venture.

Approval of IOC and NPCIL boards will enable IOC to enter into NPCIL's immediate expansion projects at Kudankulam in Karnataka, Kakrapar in Gujarat and Rawatbhata in Rajasthan. NPCIL is planning an aggregate capacity of 3,800 mw at these three sites, a government official said. As per industry standards, cost of setting up a megawatt of nuclear power requires an investment of Rs 8-10 crore.

"The details of the joint venture agreement are being worked out. Besides, greenfield projects we are also looking at picking up equity in NPCIL's upcoming projects. Our partnership in a project will depend upon its viability," Bansal said.

IOC had last year signed a memorandum of understanding with NPCIL to set up at least one nuclear power project. The move is part of IOC's diversification plans. The company has forayed into wind power generation and is developing a thermal project with Tata Power. The company is also looking at other renewable source of energy generation.

With the proposed joint venture, IOC will be able to leverage upon NPCIL's expertise in the nuclear sector. NPCIL has preliminary agreement with France's Areva for supply of six nuclear reactors with lifetime fuel supply for a proposed park at Jaitapur in Maharashtra. Toshiba and GE are the leading international nuclear reactor suppliers to NPCIL, the only company permitted to produce electricity through nuclear plants in the country.

NPCIL aims to achieve a 10,000 mw capacity in the 11th Plan period, against about 4,000 mw at present.