National Aluminium Company Ltd (NALCO) has captured the attention of investors following a significant move to bolster its long-term power reliability. In collaboration with NLC India Ltd, another government-owned entity under the Ministry of Coal, NALCO is set to develop a captive thermal power plant with a capacity of 1,080 MW in Odisha.
Current NALCO Share Price on NSE
As of approximately 10:52 AM on July 9, NALCO’s shares were priced at Rs 346.70 on the NSE, reflecting a decrease of 0.87% from the prior closing figure. The stock began trading at Rs 350.10, reached a peak of Rs 351.80, and fell to a low of Rs 341.90 during the trading session. Conversely, NLC India shares experienced an increase of nearly 2%, as investors responded positively to the announcement regarding the new power project.
NALCO and NLC India Establish Joint Venture for 1,080 MW Power Plant
NALCO has disclosed to stock exchanges that it has entered into a Joint Venture-cum-Shareholders’ Agreement (JVA) with NLC India to create a joint venture company, with both parties holding a 50:50 stake, aimed at constructing a 1,080 MW captive thermal power facility in Angul, Odisha.
The planned plant will consist of four generating units, each with a capacity of 270 MW. Once the company is formed, both public sector firms will possess equal equity and board representation in the new venture.
This power project is specifically designed to cater to the electricity needs of NALCO’s aluminium smelter expansion in Angul, which has a capacity of 0.5 million tonnes per annum.
By establishing its own captive power source, NALCO aims to ensure a reliable electricity supply for its growing operations while decreasing reliance on external power sources. This initiative is also anticipated to provide improved cost predictability over time, a crucial aspect in a commodity sector where profit margins can vary with global metal pricing.
For investors, this agreement underscores NALCO’s commitment to enhancing its integrated manufacturing capabilities while facilitating future growth in capacity.
NALCO-NLC India Joint Venture to Enter 25-Year Power Purchase Agreement
As part of the agreement, the joint venture will establish a 25-year Power Purchase Agreement (PPA) with NALCO, ensuring the complete output from the plant is exclusively supplied to the aluminium manufacturer.
The tariff for the project will be determined in accordance with Section 62 of the Electricity Act, 2003, pending approval from the relevant regulatory authority.
To guarantee a steady supply of fuel, the joint venture will also finalize a long-term Fuel Supply Agreement (FSA) with NLC India, with coal sourced at prices set by Coal India, which will provide more stability regarding fuel expenses.
Furthermore, both companies plan to investigate long-term agreements for 200-250 MW of continuous renewable energy, demonstrating their commitment to integrating cleaner energy solutions alongside traditional power generation when feasible.
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