GAIL (India), a central public sector undertaking, and Rajasthan Rajya Vidyut Utpadan Nigam (RVUNL) have entered a joint venture agreement (JVA) for the development of large-scale renewable energy projects and transfer of existing gas-based power assets in Rajasthan.

The joint venture company will target developing approximately 750 MW of solar and 250 MW of wind capacity. The renewable energy projects are expected to be bundled with the existing gas-based power output to ensure efficient and complementary power generation.

Under the agreement, two gas-based power plants, one of 330 MW capacity at Dholpur and another of 270.5 MW capacity at Ramgarh, will be transferred to the joint venture company.

The joint venture company will be incorporated initially as a wholly owned subsidiary of RVUNL, and GAIL will infuse equity to become an equal partner. GAIL’s investment will be made either through subscription or purchase of shares upon fulfillment of the agreed conditions

The initial authorized and paid-up capital of the company is ₹1 million (~$11,416.25), with shares issued at ₹10 (~$0.11)/equity share. The board will consist of six directors, with each company nominating three directors.

A lock-in period of five years from the date of incorporation has been established for the two parties. The agreement also grants both companies the right of first refusal in case of equity transfer to a third party.

The transaction is not considered a related party transaction, and neither party is related to the promoter or promoter group of the other. There are no applicable termination or amendment clauses at this stage.

In April this year, GAIL floated an engineering, procurement, and construction tender for a 17.5 MW floating solar project at its facility in Pata, Uttar Pradesh.

In February, GAIL announced an increase in its startup investment fund from ₹1 billion (~$11.53 million) to ₹5 billion (~$57.67 million). The increased funds will be deployed to nurture promising startups with a focus on clean energy, renewables, energy storage, electric mobility, and digital transformation.