The Centre is looking to move amendments to the Atomic Energy Act, 1962 to enable the licensing of three joint ventures proposed by state-owned Nuclear Power Corporation of India Ltd — with NTPC Ltd, Indian Oil Corporation and National Aluminium Company Ltd (Nalco) — to set up new atomic power projects in the country.
Amid concerns over India’s nuclear liability provisions holding up the deployment of imported Light Water Reactor-based projects in collaboration with global vendors, the proposal by NPCIL to strike joint ventures with cash-rich PSUs is being seen as an alternative strategy to tide over the paucity of funds and ramp up execution capability for new projects using the indigenous pressurised heavy water reactor technology.
“Amendments to the Atomic Energy Act, 1962 to enable the licensing of NPCIL’s three joint ventures — with NTPC, Indian Oil Corporation and Nalco — to set up nuclear power projects is under active consideration,” a Department of Atomic
Energy (DAE) official said.
The leveraging of NTPC, IOC and Nalco’s project execution capabilities is part of the DAE’s medium-term plan. Under the short-term capacity expansion programme, the NPCIL is already working on ramping up the existing capacity of 5,780 MWe by three folds by the year 2023-24.
Currently, nuclear power reactors set up in the country are being funded by a mix of debt and equity and are executed by NPCIL.
The equity requirements are met from internal resources of the NPCIL, a PSU under the DAE, and domestic budgetary support.
While NPCIL itself has Rs 12,000 crore of investible surplus, the three other PSUs, including NTPC, Nalco and IOC, have broadly agreed to bring in Rs 10,000 crore each.
NPCIL has entered into three separate joint ventures with the three companies. However, these companies require an amendment to the Atomic Energy Act to start functioning and the joint ventures are waiting for the amendment.
The plan entail IOC, NTPC and Nalco each picking up 49 per cent equity in atomic projects proposed to be set up in partnership with NPCIL, which will hold majority equity in the three proposed ventures.
NPCIL now operates 21 reactors with a generation capacity of 5,780 MWe. “Of the 20,000 MWe target for 2020, NPCIL — which has a surplus of Rs 12,000 crore, including cash reserves — can manage only about 10,000 MWe of new capacity through its own financial resources. Hence, funding from other sources is needed to supplement NPCIL’s efforts and the best candidates are PSUs, especially those in the core sector with strong financials and cash flows, an official said.
The Atomic Energy Act, 1962 prescribes that a company in which not less than 51 per cent of the paid-up share capital is held by the Central government can operate nuclear stations. However, the licensing of joint ventures is a grey area.