NLC India Limited has signed a Joint Venture Agreement with National Aluminium Company Limited (NALCO) to form a new company. This venture will develop a 1,080 MW coal-based Thermal Captive Power Plant in Angul, Odisha. The plant aims to meet the captive power needs for NALCO’s aluminium smelter expansion. The JV will have a 50:50 equity split, with both companies holding equal nomination rights on the board.
NLC India and NALCO Form Joint Venture for Power Plant
NLC India Limited has entered into a significant Joint Venture Agreement with National Aluminium Company Limited (NALCO). The primary objective of this collaboration is to establish a new Joint Venture Company (JVC). This JVC will be responsible for the development of a 4×270 MW (1,080 MW) Coal based Thermal Captive Power Plant located in Angul, Odisha. The strategic aim of this project is to fulfill the captive power requirements for NALCO’s planned 0.5 MTPA Aluminium Smelter Expansion Project.
JV Structure and Equity Details
The newly incorporated JVC will be established on a 50:50 equity basis between NLC India Limited and NALCO. Upon incorporation, both companies will hold an equal share of equity in the venture. Special rights have been agreed upon, including the right to appoint directors and first right to share subscription. The equity shares for the JVC will be issued at a face value of Rs.10/- each, reflecting the 50:50 partnership.
Key Agreements and Terms
The JV Company is set to execute a Fuel Supply Agreement (FSA) with NLCIL from its Machhakata coal mine or other designated mines for a period of 25 years. Furthermore, a Power Purchase Agreement (PPA) will be executed with NALCO for the offtake of 100% of the power generated, in accordance with Section 62 of the Electricity Act, 2003, also for a term of 25 years.
Related Party and Transaction Details
It has been confirmed that the parties involved in this agreement are related to each other. However, the transaction itself is not considered a related party transaction. The agreement does not involve any conflict of interest for the listed entity. Both NLCIL and NALCO will have equal nomination on the Board of Directors of the Joint Venture Company.
Source: BSE
