Coal India has formed a power generation joint venture (JV) with NLC India to develop solar and thermal power assets.

The two companies have agreed to develop 3GW of solar power assets and 2GW of thermal capacity across India. Sources told India’s Economic Times the joint solar investment could be worth $1.6bn (Rs120bn)

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The two companies signed an initial agreement to develop thermal and solar power capacity 21 months ago.

As per the terms of the agreement from October 2018, Coal India and NLC India agreed to complete the development of solar projects within 15 months. Following this, both have given up to five years for the thermal power projects.

The reason for the delay in implementing the agreement was not disclosed.

Both Coal India and NLC India will have an equal ownership stake in the JV company. The companies intend to use the JV to further strengthen their presence in the country’s power generation sector.

News agency PTI quoted Coal India as saying in a statement: “This JV aims to utilise the core capabilities and infrastructure of Coal India and NLC India for the creation of power assets to harness renewable sources of energy.

“The JV company will ensure sustainable growth and contribute to achieving the ambitious solar power programme of both companies.”

In September 2014, Coal India unveiled its plans to build solar projects worth $1.2bn (Rs70bn) in the country, in a bid to compensate for the carbon pollution caused by its plants. At the time, Coal India said it will need almost 5,000 acres of land for the intended 1GW of solar projects.