Coal India has approved the incorporation of two joint venture companies to develop renewable energy projects across India.

The first joint venture has been proposed with Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUNL) to develop solar projects across Uttar Pradesh.

Under the proposed structure, the joint venture company will be a subsidiary of Coal India, with Coal India holding a 51% equity stake and UPRVUNL holding the remaining 49%.

The entity will operate in the energy sector and undertake the development, construction, operation, and maintenance of renewable energy projects, including solar, floating solar, pumped storage projects, wind, and allied activities, as well as the sale of power in accordance with applicable laws and policies.

The joint venture will be subject to approvals from the Uttar Pradesh government, Department of Asset and Public Asset Management (DIPAM), and the Ministry of Coal.

Coal India’s investment will be through equity participation, involving the subscription of 51,000 equity shares at ₹10 (~$0.11) each.

The name and date of incorporation of the joint venture will be announced after the approvals are obtained.

Joint Venture with DVC

In another development, the Coal India Board granted in-principle approval for an equity infusion of ₹31.32 billion (~$342.39 million) into a proposed joint venture with Damodar Valley Corporation (DVC), as part of an indicative project cost of ₹208.86 billion (~$2.31 billion) with a debt–equity ratio of 70:30.

Under the proposal, Coal India and DVC will each hold a 50% equity stake in the joint venture, which will operate in the energy sector.

The joint venture is intended to collaborate on power generation projects, including thermal and renewable energy projects with or without storage, to meet growing energy demand in the DVC valley region and other parts of India.

The equity infusion will be made through cash consideration, with Coal India contributing to 30% of the project cost, while the remaining 70% will be funded through debt.

The joint venture will begin with an initial capital of 50,000 equity shares of ₹10 (~$0.11 each).

In December last year, the Comptroller and Auditor General of India (CAG) pulled up Coal India for the tardy implementation of its solar energy initiatives and recommended that it ‘fast-tracks’ project execution to meet its net-zero targets. In its compliance audit report, the CAG said Coal India and its seven subsidiaries had achieved only 4.08% of the targeted 3 GW of solar capacity by the end of 2024.

Also, last December, Coal India floated a tender for the development of a 20 MW floating solar project at Chilwa Taal, Gorakhpur, Uttar Pradesh.