Kolkata, Oct 9 (IANS): Coal India Limited (CIL) and NLC India Limited (NLCIL), formerly Neyveli Lignite Corporation Limited, on Monday signed a Memorandum of Understanding (MoU) for formation of a joint venture (JV) company for solar power generation of 3,000 MW and thermal power projects of 2,000 MW capacity.

CIL is tasked to become a net zero energy company by Ministry of Coal, a move which entails the company to generate 3,000 MW of solar power.

The MoU, also extends for 2,000MW of thermal power generation across CIL's subsidiaries. Solar power projects will be set up in the identified barren and reclaimed free land of the coal miner and also across the country where land is available, requiring around 15,000 acres.

The estimated cost for CIL's solar power generation is pegged at Rs 12,000 crore, a Coal India official said.

The JV company to come up on equal equity participation of 50:50 has a time line of 15 months for completion of solar power projects and 60-month period for TPPs.

The projects will be financed through debt equity ratio of 70:30 as per the CERC norms. A concept paper has been initiated by both the companies to get clearance from their respective boards.

"This is a synergistic step, combining the resources of both the companies for a common goal. CIL will be riding the core technical expertise of NLCIL in thermal power generation and solar PV power," said a coal India official.

The miner's Director (Technical) Binay Dayal signed the MoU on behalf of CIL while N.N. Maheswar Rao, Director, Technical (Projects & Planning) inked the pact on behalf of NLCIL in the presence of miner's Chairman Anil Kumar Jha, and Rakesh Kumar Chairman, NLCIL.