IndianOil to invest in nuclear venture with Nuclear Power Cor poration

IndianOil climbs onto the nuclear power bandwagon

IndianOil is looking to invest up to Rs 1,500 crore in its maiden nuclear
venture in partnership with Nuclear Power Corporation of India Ltd (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 2 x 700 MWe to 2 x 1,650 MWe in the first phase.

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

NPCIL is setting up new capacities based on pressurised heavy water reactors
of 700 core group to study investment options 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
pressurized reactor (EPR) models of 1,650 MWe for new capacity. A core group
comprising officials of both NPCIL and IndianOil 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, IndianOil 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.
By Richa Mishra & Anil Sasi, Business Line, New Delhi, 19 November 2009