MoP yet to okay NTPC's R-energy foray

Power major, NTPC, is yet to hear from the Ministry of Power (MoP) on its proposal for a joint venture agreement (JVA), towards a renewable energy company, with Asian Development Bank (ADB) and Kyuden International Corporation, a subsidiary of Kyushu Electric Power Company of Japan. NTPC plans to leverage its JV partners` domain expertise for installing 500 MW worth of renewable energy-based projects.

• While NTPC approached the MoP on this issue back in May, the ministry's silence is inexplicable.
• The Board of Directors of NTPC gave its blessings for venture in April 2010, as did the Boards of the two foreign entities. Thus, only the MoP now stands in the way of NTPC`s foray into the alternative energy sector.
• Once the proposal is approved, the three partners will induct a fourth partner into the joint venture, within 12 months. 
• At present, NTPC is to hold a 50% stake in the JVC, while the remaining equity will be contributed in equal measure by its partners. Subsequent to the entry of the fourth, yet-to-be-selected investor, NTPC`s share will be diluted to 40.3%. 8Initially, the JVC proposes to focus mainly on wind and mini and micro hydroelectric projects, while, later, it would also foray into other renewable energy domains, such as solar, geothermal and bio-fuel based power projects.