State-owned National Aluminium Company (Nalco) has chalked out plans to enter the power business through the special purpose vehicle (SPV) route. The company plans to produce over 2000 MW by 2016.

Once equity investment in its power business starts, Nalco will hive off the business into an SPV named Nalco Power or Nalco Energy. "We will create an SPV in investment in the power sector. Our existing power plants will not be shifted into the SPV, as they are for Nalco's captive smelter use. That model will continue as it is," B L Bagra, director (finance), Nalco said.

The company may even list the SPV once it has few projects under its belt.

Bagra said, "According to the corporate plan we have made, we should by 2016 be operating at least 1000 MW of independent power, not linked to our aluminium business. That will happen with the power plant in Gujarat, so we feel that we should reach more than 2000 MW by 2016."

Nalco has tied up with Nuclear Power Corporation to set up a power plant in Gujarat. The 2x700-MW plant will be built at a cost of Rs 13,000 crore (Rs 130 billion) and Nalco has a 49 per cent stake in it.

Apart from the plant in Gujarat, the company would bid for two ultra-mega power plants, one each in Orissa (near Sundergarh) and Chhattisgarh.