Government-owned NHPC Limited inked a memorandum of understanding with Damodar Valley Corporation on Wednesday with an objective to explore the formation of a joint venture company to set up hydropower and pump storage projects.

"The MoU heralds a new dawn in cooperation between the two power sector organisations in jointly harnessing hydropower projects and pump storage projects as energy solutions in line with the national objective of energy transition i.e, 500 GW of renewable energy by 2030 and Net Zero by 2070," NHPC said in a statement to the stock exchanges.

DVC, which currently has joint ventures with Tata Power and Sail, has lined up an aggressive expansion plan in both thermal and renewable energy in a bid to more than double its current generation capacity. DVC's own generation capacity from all sources stands at 6901 MW and an additional 1388 MW through joint ventures.

It is also diversifying in new areas such as pumped hydro storage, battery energy solar system, ground-mounted and floating solar, green hydrogen, and electric vehicle infrastructure development. Around 3650 MW of renewable energy projects have been identified by DVC for completion by 2028.

DVC chairman Ram Naresh Singh had recently said that the 1500 MW pump storage project a Lugu Pahar on the Bokaro river is expected to come up by 2028 and the central power utility has identified another prospective 600 MW pump storage project at Panchet Hills.

NHPC, meanwhile, has secured pre-investment activities approval from the union power ministry for the 1856 MW Sawalkot hydroelectric project in Jammu and Kashmir. NHPC's current power stations have a combined capacity of around 7000 MW.

NHPC has also secured board approval to raise debt amounting up to Rs 6300 crore during 2022-23 through the issuance of secured/unsecured, redeemable, taxable, non-convertible corporate bonds on a private placement basis and also term loans and external commercial borrowings, as per regulatory disclosure.