"We are planning to set up a 800 mw hydro power project in Himachal pradesh. Talks with the concerned state government are on and we hope to sign a memorandum of understanding (MoU) with them soon," NTPC chairman and managing director Rajendra Singh told PTI.

This would be a major step towards NTPC diversifying in the hydro sector. The "Koel dam hydro power project" would be the run on the river project and is a new green field project proposed to be taken up by the corporation, Singh said.

A team of officials from NTPC and the power ministry had last week visited Shimla to discuss with state authorities the public sector's plan to execute the project.

Asked whether NTPC would be scouting for a joint venture partner to execute the project, Singh said, "this is a green field project and we are planning to proceed alonein executing and managing the project."

NTPC is discussing with the Himachal government issues like land acquisition and other technical aspects of the project, power ministry sources said.After the MoU is signed with the state government, NTPC would start preparing the detailed feasibility report (DFR) for the project which has to get a techno-economic clearance (TEC) from the Central Electricity Authority (CEA), sources said.

The Himachal government and the Centre would also have to give an environment clearance to NTPC before the project is taken up, they said adding all these clearances would not be a problem to the corporation once the MoU is signed.

After getting all these clearances the corporation would take about five to six years for completion of the hydro power project, the sources said.