Chennai, Jan 3 (.) Credit rating agency India Ratings and Research expects that allowing private engineering, procurement, and construction (EPC) players in India’s nuclear energy sector to provide a long-term sustainable order book for established entities, while the risks of liability persist.
Recently, the government cleared the Sustainable Harnessing of Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, a reform that allows for a dilution of the public sector/government monopoly over India’s atomic energy sector.
This is aimed at meeting India’s long-term target of 100GW nuclear capacity by 2047 by allowing the participation of private players.
Previously, EPC entities have been receiving small package orders from the Department of Atomic Energy (DAE) and Nuclear Power Corporation of India Limited (NPCIL), mostly for the creation of civil infrastructure and supply of specialised materials.
With the introduction of the SHANTI Bill 2025, private players are expected to play an extended and pivotal role, India Ratings said.
The rating agency suggests capping the private sector’s participation in the nuclear power sector at a maximum of 49 per cent and a minimum of 25 per cent, with NPCIL/government holding the remaining stake.
“India’s SHANTI Bill opens the nuclear sector to private EPC players, unlocking a Rs 20 trillion-25 trillion opportunity for those with strong balance sheets, while success depends on risk-sharing and government support,” says Krishan Binani, Director, Large Corporates, India Ratings.
Typically, the cost per MW of a pressurised heavy water reactor is anywhere between Rs 150 million – 180 million (can exceed Rs 200 million), and the Voda Voda Energo Reactor (1,200) costs between Rs 200 million and 250 million per MW.
According to India Ratings, given the ambitious expectation of 100GW by 2047 and the timelines needed for the construction of such capacity, the order inflows and construction activities should start within the next five years (lead time of at least five to eight years).
The overall order inflows shall be Rs 200 billion – 250 billion per GW, and hence, there is a massive order book potential of Rs 20 trillion – Rs 25 trillion. While the entire order book might not flow to the private sector, a substantial amount of at least 25 percent to 40 percent of the budgeted cost could give a boost to the EPC sector, the credit rating agency said.
India Rating believes that success of private sector participation depends on several factors. These include timely approvals for licensing activities, availability of nuclear-grade concrete, limited nuclear-qualified civil contractors and import dependencies.
Also included are major legislative hurdles, including nuclear liability risk (The Civil Liability for Nuclear Damage Act, 2010) and Atomic Energy Act 1962, which specifies the ownership to be with the government of India.
India Ratings opines that although the government has allowed participation of Indian EPC private players in the nuclear energy sector, it would take at least four years for their involvement to become relevant for the sector’s long-term growth.
Addressing the challenges, coupled with government support, would attract stakeholders to the sector. EPC contractors may not be fully prepared to absorb nuclear risk. Also, lenders might hesitate to finance projects without adequate assurance from the government.
. VJ VAN PRS