Coal Linkage And Funding Hinder UP 3,200 MW Power Expansion

25 Jun 2026 CW Team

Coal linkage has been cited as the principal bottleneck, with Coal India (CIL) offering supplies from a costlier source and the state seeking reallocation to cheaper coal to protect tariffs. A senior energy official said only around 50 per cent of the required coal was available from the proposed allocation, raising doubts about long-term viability. The state has asked CIL to consider reallocation or flexi-utilisation to ensure affordable fuel. A high-level meeting chaired by the chief secretary brought together CIL, NTPC and state energy officials.

Funding is also a constraint after NTPC's board approved an investment ceiling of around Rs 50 billion (bn), a limit viewed as insufficient for the joint ventures. NTPC has approached the central government for an enhanced cap and the state has urged the corporation to pursue approvals so that finance does not stall execution. Officials said financial closure would be required before contractors and lenders commit to construction.

Land acquisition and rehabilitation present further hurdles, as settlements have developed near older thermal sites and affected families will need relocation before work can begin. Preliminary planning for rehabilitation is underway, but authorities acknowledge the process will require careful handling to avoid delays. Further talks involving senior central and state officials, CIL and NTPC have been planned to revive momentum. The proposed 3,200 MW addition remains strategically important for Uttar Pradesh, given rising demand from urbanisation, industry and rural electrification.

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Uttar Pradesh's plan to add 3,200 megawatt (MW) of thermal capacity has stalled as two proposed projects, Obra-D and Anpara-E, each of 1,600 MW, have made little progress since cabinet approval in mid-2023. The schemes were planned as joint ventures between UP Rajya Vidyut Utpadan Nigam (UPRVUNL) and NTPC to strengthen baseload generation. Nearly three years after a memorandum of understanding, on-site work remains at a preliminary stage. Officials point to unresolved fuel and financing arrangements.Coal linkage has been cited as the principal bottleneck, with Coal India (CIL) offering supplies from a costlier source and the state seeking reallocation to cheaper coal to protect tariffs. A senior energy official said only around 50 per cent of the required coal was available from the proposed allocation, raising doubts about long-term viability. The state has asked CIL to consider reallocation or flexi-utilisation to ensure affordable fuel. A high-level meeting chaired by the chief secretary brought together CIL, NTPC and state energy officials.Funding is also a constraint after NTPC's board approved an investment ceiling of around Rs 50 billion (bn), a limit viewed as insufficient for the joint ventures. NTPC has approached the central government for an enhanced cap and the state has urged the corporation to pursue approvals so that finance does not stall execution. Officials said financial closure would be required before contractors and lenders commit to construction.Land acquisition and rehabilitation present further hurdles, as settlements have developed near older thermal sites and affected families will need relocation before work can begin. Preliminary planning for rehabilitation is underway, but authorities acknowledge the process will require careful handling to avoid delays. Further talks involving senior central and state officials, CIL and NTPC have been planned to revive momentum. The proposed 3,200 MW addition remains strategically important for Uttar Pradesh, given rising demand from urbanisation, industry and rural electrification.

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