Strategic Partnership

NALCO Signs Joint Venture Agreement with NLC India for 1,080 MW Captive Power Project

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National Aluminium Company Limited (NALCO) has entered into a Joint Venture Agreement (JVA) with NLC India Limited (NLCIL) to establish a 50:50 Joint Venture Company (JVC) for developing a 1,080 MW (4×270 MW) thermal captive power plant at Angul, Odisha. The project is intended to meet the captive power requirements of NALCO’s 0.5 MTPA aluminium smelter expansion, while also providing long-term renewable energy and coal supply arrangements.

PRICE-SENSITIVE TRIGGER

Event: Signing of Joint Venture Agreement with NLC India Limited.

Type: Strategic Partnership

Impact: Positive

Immediate Effect: NALCO and NLC India will incorporate a jointly owned company to develop captive power infrastructure, strengthening long-term energy security for NALCO’s aluminium expansion project.

Financials:

Project Metrics:

Project Capacity: 1,080 MW (4 × 270 MW)
Ownership Structure: 50:50 (NALCO : NLC India)
Power Purchase Agreement: 25 years
Renewable Energy Arrangement: 200–250 MW firm Renewable Energy (RE-RTC)
Coal Supply: Long-term Fuel Supply Agreement with NLC India

Highlight:

The joint venture secures long-term captive power for NALCO’s aluminium expansion while combining thermal and renewable energy sourcing under a strategic partnership between two Government-owned enterprises.

What Happened ?

NALCO announced that it has signed a Joint Venture Agreement with NLC India Limited for incorporation of a 50:50 Joint Venture Company.

The proposed entity will develop a 1,080 MW thermal captive power plant at Angul, Odisha, primarily to meet the electricity requirements of NALCO’s planned 0.5 MTPA aluminium smelter expansion.

Besides thermal generation, the agreement also includes plans to explore 200–250 MW of long-term firm renewable energy (RE-RTC) and establish long-term coal supply arrangements.

Key Details

Joint Venture Structure:

The Joint Venture Company will be newly incorporated, with:

NALCO holding 50% equity
NLC India holding 50% equity

Both companies will have equal representation on the Board of Directors.

Project Purpose:

The JVC will:

Develop a 4×270 MW captive thermal power plant at Angul, Odisha.
Supply power to NALCO under a 25-year Power Purchase Agreement (PPA).
Secure coal through a long-term Fuel Supply Agreement (FSA) with NLC India.
Explore procurement of 200–250 MW firm renewable energy for long-term energy requirements.

Governance:

Equal board nomination rights for both partners.
Equity shares will be issued after incorporation according to the agreed ownership ratio.
No special rights relating to preferential share subscription or capital restructuring have been disclosed.

Related Party Status:

Although both companies are Government-owned enterprises, the transaction is exempt from related party transaction provisions under applicable regulations.

Business Impact:

The project is expected to:

Ensure reliable captive power availability for NALCO’s aluminium expansion.
Improve long-term energy security.
Reduce dependence on external electricity procurement.
Integrate conventional and renewable energy sourcing for operational stability.

Investor Relevance:

Power availability is a critical cost driver in aluminium manufacturing. The captive power project is expected to support future production capacity expansion while providing greater visibility over long-term energy costs.

Risk Analysis

Summary:

The strategic partnership strengthens NALCO’s future energy infrastructure, although project execution and timely commissioning remain important milestones.

Risk Points:

Execution and construction risks associated with a large thermal power project.
Regulatory approvals during incorporation and project implementation.
Coal supply and environmental compliance.
Capital expenditure and project timeline risks.

Worst Case:

Delays in project implementation or power plant commissioning could postpone the operational benefits expected from NALCO’s aluminium expansion.

Risk Level: Medium

Company Commentary

NALCO and NLC India have signed a Joint Venture Agreement on 8 July 2026.
The companies will establish a 50:50 Joint Venture Company.
The project involves development of a 1,080 MW captive thermal power plant at Angul, Odisha.
The agreement also provides for a 25-year Power Purchase Agreement, long-term coal supply, and exploration of renewable energy procurement.

Official Exchange Filing: National Aluminium Company Limited (NALCO)

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