nuclear power corporation of india and finacing of reactors

Nuclear power corporation of India ( NPCIL )and financing of reactors

Presently  about  40 countries are currently initiated nuclear power addition in global scenario. The major problem is NPCIL  financing for purchase of nuclear reactors.

NPCIL chair man and  managing director  Mr.Jain admits that Indian nuclear ambition is large ,but it needs to be realized urgently  to accelerate process NPCIL is now forming joint ventures ( J Vs )  with foreign companies and Indian power equipment manufacturers to build nuclear reactors for creating capacities and mobilize funds. The JV route is obvious considerably due to enough constraints in procuring nuclear reactors and forging materials.

“ such  JV are  essential, there are severe supply constraints for forging and castings, both in terms of  size and volume, steam generator tube production capacity, and special grade steel in terms  of volume “  Mr. Jain said.

“ Typically   nuclear power plants are developed as 70 : 30 debt equity -ratio  and don’t  get any government budgetary allocation “ Mr. Jain said.

NPCIL has cash surplus of RS 13,000 crores its   assets are worth RS 38,448 crores and net worth of RS 21,268 crores. The equity will be raised from internal and extra budgetary resources of NPCIL and participation of partners. 

“For PHWR ( pressurized heavy water reactors )the debt is planned  from domestic borrowing. The light water reactors the debt expected to come from vendors home country government loan and market borrowing. The key  would be to reduce the cost of capital particularly debt and also ensure that our interests are protected over long time “ says Jain.

As a beginning NPCIL, BHEL and Alstoms Indian arm APIL  have formed a JV  to provide technical support and supply turbines to nuclear power projects in India. APIL is one -third equity partners  with capital 25 billion Euros -JV initially will be supply turbines to eight units of 700 M.W. each being developed by NPCIL value will be around RS 6000  crores. The eight nuclear reactors are planned in Haryana, Gujarat, Rajasthan and Madhya Pradesh with heavy water reactors.
 
NPCIL and L& T have entered into a joint venture to produce special steels and ultra heavy forging. The JV was incorporated as a subsidiary of L&T with NPCIL holding 26 per cent of paid up capital. Mr. Jain explains that indigenous manufacture of forging would close critical gap in India industry  capability to produce equipment for nuclear and thermal power plants.

‘Earlier NPCIL  also formed JV with India’s largest power producer NTPC to set up nuclear power projects. IOC India oil corporation has  indicated that it will contribute RS 10,000 crores towards equity. Similarly  NPCIL entered into JV  with National Aluminum Company Limited (NALCO ) for financing nuclear power projects. NALCO expected to contribute RS 5000 crores towards to equity “ Jain added.
NPCIL also in discussion with steel authority of India and Indian railways for similar JV.

TARGETS

‘ Ensuring a smooth supply chain and project execution capacity enhancement  of Indian industry adequacy and appreciativeness  human resources and appropriate partnership for  investment in power program are key to success. ’ Jain explains.

The average tariff 2009-10 maintained at the same as  RS 2.30 per unit as 2008-09 despite 15 per cent increase in fuel  cost.” With  measures such as increasing the unit size of future reactors and reduction gestation period, nuclear power would be further competitive “ Jain explains. At same time, localization of technology and supplies would help in bringing down  the capital cost ,thereby making tariff more competitive. Mr. Jain very optimistic about nuclear power future in India.