The Modi government is set to nurture the nuclear ambitions of the country's largest power producer NTPC by facilitating amendments to the Atomic Energy Act (AEA), allowing a joint venture between two government entities or public sector undertakings to put up projects in the nuclear field.
Although NTPC, India's largest power generator, had entered into an MoU with state-run Nuclear Power Corporation of India (NPCIL) way back in 2009 for setting up nuclear power ventures, the project did not take off because AEA doesn't recognise the JV (special purpose vehicle) automatically to be a PSU. The proposed amendment, as per favourable advice from the law ministry, sources said, would solve this problem.
Currently, activities in the nuclear field, including setting up of nuclear power plants, are exclusively limited to the government and PSUs owned by it. Private entities, including those in joint ventures with government entities and special purpose vehicles (SPV), are not allowed to enter the nuclear field even if it means operations for civilian purposes.
Sources said the power ministry has asked the Prime Minister's Office to resolve the issue by taking the proposed amendments in the AEA for Cabinet approval before it can be introduced in Parliament. The department of atomic energy has also moved for amendments after getting approval from the law ministry. “NTPC has also pushed for clarity over the issue that has prevented Anushakti Vidhyut Nigam, a 51:49 joint venture between NPCIL and itself, to start operations,” said an NTPC official asking not to be named.
The two signed an MoU for setting up the JV in 2009 but failed to make any headway due to legal issues coming in way of the JV company.
NTPC proposed to enter nuclear power generation with NPCIL with an initial capacity of 2000 MW. This would have entailed a total investment of close to R20,000 crore. Nuclear power, being a highly capital intensive sector, requires about R10 crore per MW and projects are generally financed in 70:30 debt-equity ratio.
The clarity coming by way of amendments to the AEA is expected to help other such SPV being considered by NPCIL. State-owned upstream oil major ONGC had also indicated its interest in forging an alliance with NPCIL for setting a power project with 2,000 MW capacity.
With the first unit of the Kudankulam Nuclear Power plant attaining its maximum capacity of 1,000 MW