MUMBAI: Tata Power, India’s largest private utility, has planned a joint equity investment of Rs 4,000-Rs 5,000 crore over five years to build joint venture hydropower projects with Norway’s renewable energy firm SN Power. The move signals Tata Power’s interest to increase its presence in hydro power, even as the government eases norms for investment in renewable energy projects.

The Tata group company, which has a total hydropower generation capacity of 477 mw , on Friday signed an agreement with Norway’s renewable energy generator SN Power, that will build and operate 2,000 mw by 2015 and 4,000 mw by 2020, in India and Nepal. The company has an independent power generation capacity of over 2,900 mw and plans to add nearly 5,500 mw by 2013.

“The projects will be done through a jointly-owned service company in India, which will also explore opportunities in other renewable energy sources, including wind and geothermal,” said Banmali Agarwala, an executive director at Tata Power. Each joint project will be developed through a special purpose vehicle.

For SPVs in Nepal, SN Power and Tata Power will have equal shareholding. Both companies are also considering to co-develop the Tamakoshi-3 project in Nepal, where SN Power holds licence rights. Nadia Sood, executive vice-president, South Asia, SN Power said: “Through this partnership, we would explore business opportunities in the region and may also source necessary finance from international lenders.”

Tata Power said most of the fund raising would be through debt. “We could also raise funds through selling equity stakes in the projects to international lenders like IFC and ADB,” said Tata Power’s ED S Ramakrishnan. Tata Power has posted a fiscal second quarter net profit of Rs 182 crore, compared to Rs 397 crore last year. “The company had booked a foreign exchange gain of over Rs 75 crore last year and it could be excluded. We had stable growth during the second quarter this fiscal,” he said.