India’s Government is seeking approximately $26bn (Rs2.16trn) in private investment for its nuclear energy industry as it looks to decarbonise its power sector.

This will be the first time India has pursued private investment to boost its nuclear sector, which currently constitutes just 2% of the country’s total power generation, although it has recently sought to ramp up nuclear capacity as a way to meet net-zero goals.

The government is in talks with at least five private companies including Reliance Industries, Tata Power, Adani Power and Vedanta to invest around Rs440bn each, two government sources told Reuters.

The Federal Department of Atomic Energy and Indian state-run Nuclear Power Corp of India (NPCI) have held multiple rounds of discussions with the private companies over the past year in an effort to nail down investment plans, the anonymous sources added.

They also said that under the current funding plan, which has yet to be finalised, the private companies will invest in nuclear plants, acquire land and water, and undertake construction, but the rights to build and operate any new reactors will legally belong to NPCI.

The private companies will earn revenue from electricity sales and NPCI would operate the projects for a fee, the sources said, describing a unique hybrid model of nuclear development. One added that as it stands, the plan will not require any amendments to India’s Atomic Energy Act of 1962, but final approval from the Department of Atomic Energy will be required.

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Under current law, private companies are banned from building nuclear plants on their own but can supply equipment and necessary components for any construction needed, excluding that of reactors.

The funding would aid the government in meeting its target of generating 50% of its electricity from non-fossil fuel sources by 2030, up from 42% now. The country also has a target to ramp up nuclear capacity from 7.48GW to 22.4GW by 2031, although it has consistently missed past targets.

However, India is currently heavily dependent on coal, the most polluting type of fossil fuel, with it making up more than 50% of the country’s installed capacity.

Last year, the government brought online a new 700MW nuclear reactor, which will be operated by NPCI. The state-owned company has recently committed investments to the construction of an additional 1.3GW of nuclear capacity in the coming years.