State-owned Indian Oil Corporation (IOCL) has signed a joint venture (JV) agreement with NTPC Green Energy (NGEL), a subsidiary of NTPC, to develop Renewable Energy (RE) power plants to meet round the clock power requirement of the oil marketing company’s (OMCs) refineries. The two Maharatna companies will hold equal stake in the proposed JV, IOCL said in an exchange filing.

The deal is in line with the central government’s decarbonisation push towards a low carbon future and net zero emissions, it said.

“The joint venture is a synergistic alliance that brings together the strong credentials of NTPC which is a dominant power major in India with presence in the entire value chain of the power generation business and Indian Oil's established expertise in petroleum refining along with its presence across the energy spectrum,” IOCL said in a filing on Monday.

NGEL is a 100% subsidiary of the country’s largest power generator NTPC, which aims to reach to around 10 gigawatts (GW) operational capacity by financial year 2024-25. It eyes to scale up to achieve the larger target of 60 GW by the financial year 2031-32 through multiple emerging opportunities in green energy business such as round the clock power, ultra-mega renewable parks, green hydrogen/ methanol/ ethanol/ ammonia, fuel cells, hybrid power, storage solutions, bilateral deals, etc.

Shrikant Madhav Vaidya, Chairman, Indian Oil, said, “The energy demand of the nation is growing at a rate never witnessed before. Both Indian Oil & NTPC, while retaining their core strengths must ensure energy availability, energy affordability & energy accessibility to every Indian right up to the lowest rung of the society.”

Gurdeep Singh, CMD, NTPC, said that energy transition is inevitable, what needs to see is how sustainable and how fast it can be. “We not only have an opportunity, but also a responsibility to jointly establish an example in the form of this JV, for others to emulate,” Singh added.

Following the announcement, IOCL shares opened marginally higher at ₹80.80 against the previous closing price of ₹80.56 on the BSE. During the first hour of trade so far, it touched a high and low of ₹81 and ₹79.7, respectively.

In a similar trend, NTPC shares were trading tad lower at ₹175.55 against Monday’s closing price of ₹175.9 on the BSE. It moved in a narrow range, hitting a high and low of ₹177 and ₹175.3 during the trade so far.

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