Small Is The New Big: India Opens Doors For Private Sector In Bharat Reactors

In a historic first, the Nuclear Power Corporation of India Ltd (NPCIL) issued Requests for Proposals (RFPs) to the private sector last week to set up two Bharat Small Reactor (BSR) units.

The RFP from India’s nuclear power operator marks the union government’s first formal step to decentralise the nuclear industry, opening new opportunities for private participation in a sector historically dominated by public entities.

"NPCIL has invited Request for Proposals (RFPs) from visionary Indian industries for setting up 220 MW Bharat Small Reactors (BSRs) for captive use. BSRs are 220 MW Pressurised Heavy Water Reactors (PHWR) with an impeccable safety and excellent performance record, which are compact and tailored for captive use," the PSU said in a statement.

Small Reactors

The RFP announcement follows Union Minister Jitendra Singh’s detailed outline of the government’s vision for BSRs as part of its nuclear power programme, presented in the Lok Sabha on 4 December last year.

"The standard 220 MW Pressurised Heavy Water Reactor (PHWR), which has a proven safety and performance record, is being upgraded to reduce the land requirement and make it deployable close to industries for use as a captive power plant. These reactors, termed as Bharat Small Reactors (BSRs), are planned to address the decarbonisation needs of industries like steel, aluminium, metals, etc," he said.

Setting up of 220 MW Bharat Small Reactors (BSRs) is envisaged within the existing legal framework, broadly involving the provision of land, cooling water, and capital by the private entity, with the design, quality assurance, and operation and maintenance managed by Nuclear Power Corporation of India Limited, based on agreed business models, added Dr Singh.

The Buzz

The Atomic Energy Act, 1962 (AEA) has long kept the reins of India’s nuclear energy sector firmly in the hands of the central government, granting it exclusive authority to "produce, develop, use, and dispose of atomic energy." As a result, NPCIL remains the sole entity permitted to establish and operate civil nuclear plants.

Historically, private sector involvement has been limited to engineering, procurement, and construction (EPC) roles, with companies like Megha Engineering & Infrastructures and Reliance playing supporting parts in reactor infrastructure development.

Private sector participation remains constrained in the sector due to high investment costs, safety issues, long construction times, nuclear waste management issues, and proliferation risks.

The game changed in July 2024, when the Union Budget for FY 2024-25 introduced the bold idea of private-sector partnerships to set up Bharat Small Reactors.

Now, with NPCIL’s latest announcement inviting Requests for Proposals for two BSR units, the stage is set for private players to take a central role in nuclear energy production.

How It Will Work

Aligned with the vision set out in the 2024-25 Union Budget, Bharat Small Reactors will be developed with private capital while operating within the existing legal framework and approved business models.

The winning bidder (User) will fund the construction of the BSRs. The plant will then be transferred to NPCIL for purpose of operation.

The transfer of the plant to NPCIL is for the possession, control, operation, maintenance, and decommissioning of the nuclear power plant. All costs, including applicable taxes, will be levied on the User,” the document states. The asset (the BSR) will vest with NPCIL, and only NPCIL will carry out the commissioning activity.

The private company, which will build and hand over the plant to NPCIL, will have rights to the net electricity produced (after subtracting auxiliary consumption) and can either use it for their own needs or sell it to others. The tariff for selling will be determined by the Department of Atomic Energy (DAE).

While NPCIL will handle insurance for compliance with the Civil Liability for Nuclear Damage Act, 2010, the User will bear the insurance costs.

The plant will be shut down for 35-40 days every two years for maintenance, with operation and maintenance costs at Rs 50.31 lakh per MW (2018-19 data), escalating by 6 per cent annually. These costs will be reimbursed by the User to NPCIL.

Bringing In Moolah

As per the conditions outlined by NPCIL, the private stakeholder will shoulder the responsibility for funding and land acquisition.

For a twin-unit 220 MWe BSR, approximately 331 hectares of land is needed with a 1 km exclusion zone or 87 hectares with a 0.5 km exclusion zone.

Under the proposed business model, private entities will cover all Capital Expenditure (CAPEX) and Operating Expenditure (OPEX), spanning the entire lifecycle — from pre-project phases to decommissioning and asset reinstatement in case of damage.

To provide perspective, the completion cost for similar plants, such as Rajasthan Atomic Power Project 5 and 6, was Rs 2,361.81 crore (2010 estimates).

What Next

The government’s revised regulations enabling public-private partnerships in building nuclear plants and small reactors have set the stage for a surge of private investment in the sector.

Industry giants like Reliance Industries, L&T, and Adani Group have already expressed interest, with the government eyeing a staggering $26 billion in investments to fuel this transformation.

Traditionally, nuclear projects, because of their large size and high complexity, have been dependent upon government support to ensure revenues from electricity generation and to reduce risk to investors.

However, BSR projects, being smaller and less complex at the site compared to large reactors, offer an attractive opportunity for low-cost private investment while maintaining robust safety and efficiency standards.

This initiative is a significant step toward achieving India’s ambitious goal of expanding its nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031-32 and an impressive 100 GW by 2047.

With the government now demonstrating clear commitment and “skin in the game,” private players have an opportunity to deliver the much-needed boost to India’s nuclear energy sector.

As Charudatta Palekar, an independent power consultant, aptly put it:

"This hybrid model of nuclear power project development is an innovative solution to accelerate the growth of nuclear capacity in India."