The Telegraph
Since 1st March, 1999
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Nuclear power on FDI menu

New Delhi, March 5: India is likely to lift rules that require the government to have a 51 per cent stake in companies producing nuclear energy and eventually allow foreign direct investment (FDI) in nuclear power.

Government sources said, “It is in the thinking stage and we will ultimately do this.” With India and the United States signing a civilian nuclear co-operation pact during President George W. Bush’s first visit to the country, they said the stage was set for “rolling forward these moves”.

At present, the Atomic Energy Act stipulates that nuclear power can be produced by the government or a company in which the government holds a 51 per cent stake.

Officials said this was a bait to get the US and other key members of the Nuclear Supplier Group to agree to help India in civilian nuclear technology and fuel.

US giants like General Electric Co and Westinghouse Electric Co, both of which produce power, and France’s Electricite de France are keen to enter the Indian market. Others are also exploring the possibility of selling plants and technology here. “Siemens and Alstom can be expected to tap this growing market,” J.K. Dey, former deputy managing director of Mitsui Babcock, said.

Domestic companies like Reliance Energy and NTPC have been looking for opportunities to foray into nuclear power generation and may figure among potential partners for foreign players.

“It makes sense to allow FDI if it helps bring in fresh stocks of nuclear fuel,” officials said. India produces just 3300 megawatts of nuclear energy, which is about 2.8 per cent of the total energy generated. Though the Union cabinet recently voted to build four new nuclear power plants, the country has a limited stock of nuclear fuel.

The country has an energy shortfall of nearly 10000 megawatt, which is expected to at least triple in seven years. With its coal reserves running out, India is looking at hydel as well as nuclear sources for energy. The country’s planners want India to have a capacity to generate 20000 megawatt of nuclear power by 2020.

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