IOC to take 26-49% in nuclear power plant with NPCIL

Indian Oil Corp, the nation's largest oil firm, today said it will take 26-49 per cent stake in the Rs 10,000-crore nuclear power plant it will set up in collaboration with the Nuclear Power Corp of India.

"We have signed a memorandum of understanding (MoU) for setting up at least one 1,000 MW nuclear power power plant with NPCIL," IOC Director (Business Development) B M Bansal told reporters here.

NPCIL will be the operator and take at least 51 per cent stake while IOC is contemplating taking either 49 per cent or 26 per cent interest, he said.

The two firms, he said, will in next six months decide on the site, fuel and the project structure.

"Nuclear power gives us a good opportunity to become an integrated energy firm," he said. "The nuclear power plant will cost Rs 8 to 10 crore per megawatt but the good thing is that we get 15.5 per cent return on investment and cost of electricity generation is low - about Rs 3-4 per unit.

"We want to gain experience and may be at a future date we may set up nuclear plants on our own (when the sector is opened up)," Bansal said.

IOC may invest Rs 1,000 to Rs 1,500 crore as equity in the project with NPCIL, he said.

Techno-commercial modalities, including source of nuclear fuel and site would be decided over the next six months.

"We have requested NPCIL to involve us in an approved project so that the project is constructed by 2014," he said, adding it may take 6-7 years to build a project at a site thats already not approved.

IOC signed the MoU with NPCIL on November 4 to venture into nuclear power generation.

Bansal said the two firms will over the next six months identify the project site, source of fuel and project structure.

"The project will cost about Rs 10,000 crore and will be funded in 70:30 debt-equity ratio," he added.