New Field

New Delhi, Nov. 1: State-owned Indian Oil Corporation will sign a joint venture agreement with Nuclear Power Corporation of India Ltd (NPCIL) this month.

The foray into nuclear power will turn the PSU into an integrated energy firm.

“The board of directors has approved the proposal for entering into a memorandum of understanding with NPCIL for subsequent equity participation in the proposed joint venture for entry into nuclear power generation. The MoU, valid for three years, is expected to be signed in November,” company sources said.

According to the Atomic Energy Act 1962, nuclear power can be generated only by a government entity in which the Centre holds at least 51 per cent. IOC will be a minority partner in the NPCIL venture.

IOC and NPCIL will enter into a confidentiality agreement after the MoU, and NPCIL will share project details with the refiner.

IOC is looking to participate in either of the three proposed projects of NPCIL — the 2X700 mega watt (MW) project at Kakrapar in Gujarat or Rawatbhata in Rajasthan, the 2X1000 MW project at Kudankulam in Tamil Nadu and the 2X1650 MW unit at Jaitapur in Maharashtra.

“We will look at the viability of each project and carry out a detailed financial and technical analysis before firming up the choice of power plant. We will be able to decide on the exact level of investment only after three months of signing the MoU. We will then go to our board again for investment approval,” sources said.

The estimated cost of the three NPCIL projects is Rs 14,000 crore, Rs 18,000 crore and Rs 28,050 crore, respectively. Sources said IOC was looking to pick up either a 26 per cent or a 49 per cent stake in projects.

The plans in nuclear power are part of a blueprint drawn by B.M. Bansal, the head of IOC’s new business ventures.

The company has already ventured into wind power generation and joined hands with the Tatas for a thermal power plant.

The facility will be set up in Orissa for the Paradip refinery and petrochemical complex, in which the Tatas hold a 74 per cent stake. IOC has commissioned its first wind farm at Kandla in Gujarat, which generates 21MW.

“We have already forayed into wind power and nuclear power provides us with another avenue to diversify into clean energy generation,” sources said.