Nalco & NTPC to jointly initiate Power Project in Odisha

Nalco & NTPC to jointly initiate power project in Odisha. NALCO and state-owned power producer NTPC Ltd and signed a deal to jointly set up a 2.4 giga watt (GW) power plant and one million tonne aluminium production facility in Odisha with an investment of more than Rs 36,000 crore. Formal joint venture and power purchase agreements will be in place by the end of the ongoing financial year.

The suggested power plant at Gajmara will costitute three units of 800 mega watts (MW) each and will extract coal from the mines under Nalco. The plants will have Nalco’s factory at Angul as a power customer.

 The aluminium smelter project and the power project will accelerate the industrial growth in the region. Thus, it will create direct and indirect employment for engineers, supervisors and skilled, semi-skilled and unskilled workers.

Piyush Goyal, Power minister is of the view that coal, which is available in ample amount at present, will make the new power project viable in Odisha and also enable production of aluminium cost competitive. Currently, aluminium use is going up in the automobile and aerospace industries to improve energy efficiency. The joint venture was part of the ‘Make in India’ drive.

Dharmendra Pradhan, Oil minister informed that the government was committed to building these plants with the best clean coal technology available in the world to keep pollution under check.

The construction of the power plants and the aluminium production unit will be executed in four years. The joint venture attempts to keep the cost of power generation to a minimum so as to benefit aluminium production.

Stock Analysis

Nalco share price was last trading in NSE at Rs. 61.75 as compared to the previous close of Rs. 61.00. The total number of shares traded during the day was 24,78,727 with a traded value of Rs. 1,520.45 lacs, as per NSE.

The stock hit an intraday high of Rs. 62.85 and intraday low of Rs. 60.25. Dynamic Levels have identified Nalco as one of the top 500 performing stocks for this quarter, owing to its strong fundamentals.

Road ahead

NTPC is in the process of diversifying into the commodities business, apart from entering into clean energy and nuclear energy sectors.

The government had given the approval to a deal between NTPC and Coal India Ltd in May in order to initiate three fertilizer factories with a total investment of Rs20,000 crore. State-run Indian Oil Corp. Ltd is anticipated to join the project for which state-owned Fertilizer Corp. of India Ltd. will provide land.The power producer also has a joint venture with Nuclear Power Corp. of India Ltd (NPCIL) for establishing two 700 MW nuclear power plants in Gujarat.