MC EXCLUSIVE NPCIL to target state government joint ventures as SHANTI Act clears key hurdle

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• SHANTI Act lets NPCIL form joint ventures with states for nuclear projects.
• State participation expected to ease land, water, and other execution bottlenecks
• Joint ventures may accelerate project timelines and enhance power purchase deals.

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Contrary to expectations that the SHANTI (Atomic Energy) legislation would primarily facilitate tie-ups between Nuclear Power Corporation of India Limited (NPCIL) and private companies, government officials told Moneycontrol that the law’s most immediate impact will be in enabling NPCIL to enter into joint ventures with state governments — a route that was not permitted earlier.

The SHANTI (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) Bill, 2025 has now become law after President Droupadi Murmu granted her assent, clearing the way for changes to the framework governing participation in nuclear power generation. Prior to the enactment of the SHANTI Act, nuclear power projects were restricted to central government entities, with private companies and state governments not allowed to participate as equity partners or joint venture participants, leaving development and operation largely with NPCIL and other central public sector enterprises (CPSE).

A senior NPCIL official told Moneycontrol that state participation is expected to significantly ease key execution bottlenecks such as land acquisition and water-use clearances, which are critical for nuclear power projects and have historically caused delays. NPCIL’s role is central to India’s nuclear expansion plans, with the CPSE mandated to build nearly half of the country’s targeted nuclear capacity of around 100 GW, or at least 50 GW, by 2047.

Beyond land and water

Officials said state government participation under the SHANTI Act would help NPCIL beyond land and water approvals by addressing several commercial and execution risks that have slowed nuclear capacity addition in the past.

"Nuclear power plants require large and continuous volumes of water for cooling and heat dissipation, often running into several million cubic metres annually for a large reactor, making water-use approvals a critical component of project execution," said one of the officials mentioned above.

Another key area is power offtake, as state-owned distribution companies remain the primary buyers of electricity. Officials said state joint ventures could facilitate long-term power purchase agreements (PPAs), improving offtake certainty and payment security for capital-intensive nuclear projects with long gestation periods.

"Several states, including Andhra Pradesh, Maharashtra, Tamil Nadu, Karnataka and Telangana, are also planning or scaling up large data centre capacities, which require reliable, round-the-clock power, making long-term baseload procurement an increasingly important consideration for state governments," the official said.

Besides, state governments also play a critical role in transmission planning and grid connectivity, including right of way for evacuation corridors and coordination with state transmission utilities. In addition, states are central to securing a range of local and implementation-level clearances, including rehabilitation and resettlement processes, district-level administrative permissions and coordination on environmental and coastal approvals.

"Enabling joint ventures with state governments could help accelerate project timelines by aligning central and state interests early in the project lifecycle and reducing execution risk. While private participation remains part of the broader reform agenda, state-level joint ventures are likely to be the first and most immediate outcome of the SHANTI Act," the official said.