IOC looks to invest around Rs 1500cr in nuclear power

Indian Oil Corporation (IOC) is looking to invest up to Rs 1,500 crore in its maiden nuclear venture in partnership with Nuclear Power Corporation of India (NPCIL).

The oil major is eyeing the nuclear generation space as it sees assured returns on investments. It is actively looking at project capacities ranging from 2x700 MWe to 2x1,650 MWe in the first phase.

“To start with, IOC will be investing close to Rs 1,500 crore in one project, and this investment can be increased as we get more projects,” BM Bansal, Director (Planning and Business Development), IOC, told Business Line.

NPCIL is setting up new capacities based on pressurised heavy water reactors of 700 MWe. It is also in talks with global players such as GE-Hitachi and Toshiba Westinghouse for light water reactors of 1000 MWe configuration, and with Areva SA for European pressurised reactor (EPR) models of 1,650 MWe for new capacity.

A core group comprising officials of both NPCIL and IOC will be set up to make a detailed study and assess the investment option for participation either in existing or upcoming projects, including details about the site. The companies will either form a joint venture company or float a special purpose vehicle.

Internal resources

“We would like to go as a minority partner. Subsequent to the MoU with NPCIL, data exchange will start. Since the investments in a nuclear project are comparatively lower than in a refinery, IOC will fund the project through internal resources,” he said.

Also, this venture will offer an assured return, he said. “We consider nuclear energy as an important source to bridge the energy deficit and also as an organic route of growth across the energy value chain,” he added. The present installed nuclear power capacity in India is 4,120 MWe. “Of the 20,000 MWe target for 2020, which is likely to be revised upwards, NPCIL can manage about 10,000 MWe through its own financial resources. So we need funding from other sources to supplement NPCIL’s efforts and the best candidates are PSUs, especially those in the core sector having adequate cash flows, strong financials and borrowing plans,” a Department of Atomic Energy official said.

Taken from Business Line