State-owned National Aluminium Company Ltd (NALCO) and NLC India Ltd (NLCIL) have signed a Joint Venture-cum-Shareholders' Agreement (JVA) to incorporate a joint venture company for developing a 4x270 MW (1,080 MW) captive thermal power plant at Angul, Odisha. According to reports from Business Standard, the proposed joint venture company will be jointly owned, with NALCO and NLC India each holding a 50% equity stake following its incorporation. The power project, part of NALCO's ₹30,000 crore expansion programme, will be developed with an investment of around ₹12,000 crore. The agreement was signed in New Delhi in the presence of Union Coal and Mines Minister G Kishan Reddy, Sanoj Kumar Jha, Additional Secretary in the Ministry of Coal and in-charge Chairman and Managing Director of NLC India, and Brijendra Pratap Singh, Chairman and Managing Director of NALCO. The transaction not qualifying as a related-party transaction since dealings between two government companies are exempt under the Companies Act, 2013.
The power plant will supply captive power to NALCO's 0.5 MTPA aluminium smelter expansion project, as reported by Business Standard. The project assumes significance as NALCO is undertaking a 0.5 million tonne per annum (mtpa) expansion of its aluminium smelter at Anugul, scheduled to be commissioned in 2030-31. Aluminium smelting is among the most electricity-intensive industrial processes, and the expansion is expected to require an additional 800 MW of uninterrupted captive power. The new thermal power plant has been conceived primarily to meet this requirement, ensuring a reliable and cost-effective electricity supply for the expanded smelting operations. The proposed captive power station will be developed in phases as a brownfield expansion within NALCO's existing power plant premises, allowing the company to leverage existing land, infrastructure and utilities while reducing project execution time and costs.
Under the agreement, the joint venture company will execute a 25-year Power Purchase Agreement (PPA) with NALCO for 100% of the electricity generated by the plant under Section 62 of the Electricity Act, 2003. As reported by Business Standard, the captive power plant will meet the power requirement of NALCO's 0.5 MTPA aluminium smelter expansion project. The JV entity will also enter into a Fuel Supply Agreement (FSA) with NLC India for coal at Coal India's notified price, ensuring stable fuel supply for the thermal operations. Sources indicate that NLC India will leverage its mining expertise and coal resources, including output from its Machhakata coal mine in Odisha, located close to the Anugula project site, to ensure uninterrupted fuel supplies throughout the plant's operational life. Power accounts for nearly 35-40% of aluminium production costs, and NALCO expects captive generation to shield it from fluctuations in market electricity tariffs.
The collaboration incorporates NALCO's clean energy roadmap, with the company planning to procure 200-250 MW of firm renewable energy to meet Renewable Consumption Obligation (RCO) norms. As reported by Business Standard, NLC India will facilitate this through long-term power purchase agreements or group captive arrangements from its renewable energy portfolio, helping NALCO reduce the carbon footprint of its aluminium production while meeting regulatory requirements. The collaboration will also explore long-term arrangements for 200-250 MW of firm renewable energy (RE-RTC) and secure long-term coal supply agreements, demonstrating comprehensive energy diversification plans. The arrangement is expected to provide NALCO with assured power availability while creating a stable revenue stream for the joint venture.
Following the joint venture announcement, NLC India shares advanced 2.77% to ₹302.25, demonstrating positive market response to the strategic partnership. As per Business Standard, NLC India is a Navratna public sector enterprise engaged in lignite mining and power generation, with the Government of India holding 72.20% stake as of March 2026. On a consolidated basis, NLC India's financial performance showed strong growth in Q4 March 2026, with net profit surging 189.12% to ₹1,393.46 crore while net sales rose 31.45% to ₹5,042.46 crore compared to Q4 March 2025. According to The Economic Times, NALCO expects revenue to increase to around ₹19,000 crore in FY27, supported by steady aluminium prices, higher production from its new alumina refinery and normalisation of costs.
