• The Cabinet Committee on Economic Affairs under the chairmanship of Prime Minister Narendra Modi approved a special exemption for NLC India Ltd (NLCIL) from the prevailing investment guidelines applicable to Navratna Central Public Sector undertakings.

• The decision permits NLCIL to invest Rs 7,000 crore in its subsidiary NLC India Renewables Limited (NIRL) and in turn NIRL investing in various projects directly or through formation of Joint Ventures, without the requirement of prior approval under the existing delegation of powers.

• This investment is further exempted from the 30 per cent net worth ceiling stipulated by the Department of Public Enterprises for overall investment by CPSEs in joint ventures and subsidiaries providing NLCIL and NIRL greater operational and financial flexibility.

• The decision will help NLC India to add 10.11 GW renewable energy capacity by 2030, taking it to 32 GW by 2047.

NLCIL

• NLCIL was earlier known as Neyveli Lignite Corporation India Limited. 

• It was established in November 1956. 

• Today, it is a Navratna enterprise under the administrative control of Ministry of Coal.

• Its headquarters is situated in Tamil Nadu’s Neyveli.

• NLCIL is engaged in lignite mining and power generation. 

• It has diversified into renewable energy and coal mining business in India and abroad.  

• NLCIL is pivotal in meeting the electricity demands of various states, including Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Telangana, Rajasthan, and the Union Territory of Puducherry and Andaman.

• Two subsidiary companies of NLCIL are NLC India Renewables Limited (NIRL) and NLC India Green Energy Limited (NIGEL).

• NLC India Renewables Limited (NIRL), was incorporated to focus on monetising existing renewable energy assets, optimising their value and ensuring efficient asset management. 

Significance of the Cabinet decision

• At present, NLCIL operates seven renewable energy assets with a total installed capacity of 2 GW, which are either operational or close to commercial operation.

• These assets will be transferred to NIRL pursuant to this Cabinet approval.

• NIRL, the flagship platform for NLCIL’s green energy initiatives, is exploring fresh opportunities across the renewable energy sector, including participation in competitive bidding for new projects.

• The approval aligns with the country’s commitments made during COP26 for transition toward a low-carbon economy and achieve sustainable development.

• The country has pledged to build 500 GW of non-fossil fuel energy capacity by 2030 and long-term commitment to achieve net zero emissions by 2070.

• As a significant power utility and Navratna CPSE, NLCIL is playing a key role in this transition.

• Through this investment, NLCIL seeks to substantially expand its renewable energy portfolio and contribute meaningfully to national and global climate action objectives.

• The approval is expected to reduce dependence on fossil fuels, lower coal imports, and increase reliability of round-the-clock power supply across the country.

• Beyond the environmental impact, this initiative is projected to generate significant employment — both direct and indirect — during the construction and operation phases, thereby benefiting local communities and supporting inclusive economic growth.

(The author is a trainer for Civil Services aspirants.)