NHPC, APGENCO Tie Up For 1.8 GW Renewable Energy Projects

The National Hydroelectric Power Corporation (NHPC) and Andhra Pradesh Power Generation Corporation (APGENCO) recently entered into a Memorandum of Understanding (MoU) to form a Joint Venture Company (JVC). This collaboration aims at the implementation of a total of 1.8 GW renewable energy projects in the state. These projects include, Pumped Storage Hydro Power Projects and Renewable Energy (Solar/Floating Solar/Wind) Projects in Andhra Pradesh in phases.

The project previously received approval from the NHPC Board, DIPAM, NITI Aayog, and the Ministry of Power, Government of India. NHPC and APGENCO have now signed a Joint Venture Agreement (JVA). In the first phase, two projects—Yaganti PSP (1000 MW) and Rajupalem PSP (800 MW)—with a combined installed capacity of 1800 MW (1.8GW) are planned for joint implementation. Additional projects will be identified in phase II, as mutually agreed upon.

Under the terms of the agreement, the company will be incorporated with an initial paid-up capital in a 50:50 ratio between NHPC and APGENCO. The collaboration involves an initial authorized share capital of Rs. 1 crore, divided into 10 lakh equity shares with a face value of Rs. 10/- each.

Both NHPC and APGENCO will have the right to nominate any of the directors as the chairman of the board, with appointments alternating between the two companies. Each chairman’s term will normally be for five years. During each five-year term, one party will nominate the chairman of the board, while the other will nominate the Managing Director (MD) and Chief Financial Officer (CFO) of the Joint Venture (JV) company. The parties will have the right to appoint the chairman of the board from the date of incorporation, with the chairman for the first term being from APGENCO.

NHPC and APGENCO will also alternate in nominating the MD and CFO of the company, subject to the provisions of the Act. Each appointment of the MD and CFO will normally be for a five-year term.