In a bid to establish a sector-specific long term financing mechanism for setting up nuclear power plants (NPPs), stakeholders including the central electricity authority (CEA) and Department of Atomic Energy (DAE) have suggested a 30-year tenure loan facility.

Nuclear projects present a distinctive financing challenge with high capital outlay. For instance, ₹30 crore per megawatt (MW) and above construction cost, extended gestation periods of 7–10 years, RBI’s revised project finance norms requiring 51 per cent or more of debt repayment from project cash flows, bankable PPAs, and a 10 per cent cap on cost overrun funding with asset downgrade triggers.

These structural constraints necessitate a bespoke financing architecture. These findings emerged from a workshop , organised by the Power Ministry and CEA, which included senior officials from the DAE, NTPC, Nuclear Power Corporation of India (NPCIL), financial institutions, industry stakeholders, private sector among others.

The workshop identified long-tenure debt of 30 years as essential for tariff competitiveness. For instance, it said the Rs 26,000 crore 30-year loan sanctioned to NPCIL by PFC is the first such long-tenure nuclear loan in India , thereby establishing a benchmark transaction for the sector.

This recommended multi-layered financing approach combines government infrastructure bonds, Development Finance Institution lending at concessional rates, back-loaded repayment structures aligned with tariff profiles, potential sovereign credit support, and debt-equity ratios potentially reaching 85:15 for strong balance sheet borrowers.

The representatives at the workshop also noted the interest from multilateral financiers including the BRICS New Development Bank in supporting pre-feasibility and detailed project studies for early-stage de-risking.

During the workshop, a participant inquired about the indicative tariff calculations assuming a 30-year loan tenure, which is a product not presently available in the Indian market as a standard offering.

The government officials confirmed that the tariff calculations do assume a 30-year tenure, and it was clarified that while such tenures are not directly available through standard bank products, refinancing makes 30 years achievable in practice.

PFC’s recent balance sheet loan to NPCIL at above 30-year tenure was cited as evidence by the government officials emphasising that the product is achievable, and it was noted that as the sector matures and lenders become familiar with nuclear project risk, 30-year project finance loans will follow, as has been the experience with hydro and transmission.

The government also clarified that nuclear tariffs under the SHANTI Act (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act) are neither Section 62 nor Section 63. It is a distinct cost-of-service model governed by DAE, and the Electricity Act norms do not apply.

While Section 62 of the Electricity Act deals with determining tariffs, Section 63 deals with transparent bidding to discover tariffs.

Published on May 20, 2026