Reliance Industries (RIL) has firmed up its plans to enter the power sector. Sources said the company will bid for two ultra mega power projects (UMPPs) in Chhattisgarh and Orissa. In addition, it is also likely to bid for the 2,000-MW Bhadravati project of the Ispat group in Maharashtra.

It is understood that RIL will announce its power plans at its annual general meeting on June 18. Investment in an ultra mega power project, which have a minimum capacity of 4,000 MW, would mean a minimum investment of Rs 16,000 crore by RIL in each project.

This would be the second major diversification for the country’s largest private sector company after its surprising return to the telecom sector. The two sectors were out of bounds for the Mukesh Ambani-led company until last month, thanks to a non-compete agreement with younger brother Anil Ambani. The agreement was scrapped on May 22.

FE was the first to report on May 23 that RIL was likely to enter thermal power. RIL has said that it would not enter gas-based power projects till 2022. An RIL spokesperson declined comment.

The last dates for seeking requests for qualification documents for the Chhattisgarh and Orissa projects are July 5 and July 30 respectively. Chief secretary of Chhattisgarh P Joy Oommen told FE that he was yet to get clearance for the project located in Orissa’s Surguja district, from the ministry of environment and forests.

RIL’s decision to bid for these projects will not, however, pit it against Anil Ambani’s Reliance Power. An empowered group of ministers is likely to set a cap of three UMPPs for a single industrial house. Reliance Power has won three UMPPs so far, including Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaya in Jharkhand while Tata Power has won the Mundra project in Gujarat.

Funding the projects will not be a problem for RIL, which has cash reserves of $5 billion. The company can also generate around $7-8 billion through treasury operations. ?Power is a natural area of diversification for RIL after the no-compete agreement ended. It has the skills to execute large projects and the money to fund it,? said Apurva Shah, head of research at Prabhudas Lilladher.

Thirteen players, including NTPC, Tata Power, Lanco Infratech, Jindal Power, Essar, Adani Power, Sterlite and L&T, have shown interest in bidding for the Surguja project. Power Finance Corporation is the nodal agency for the bidding process for UMPPs.

The company has also issued requests for qualification for the Bedabahal project in the Sundergarh district of Orissa. The government envisages development of 15 UMPPs. While implementation at Mundra and Sasan is at an advanced stage, Reliance Power is yet to achieve financial closure for Krishnapatnam and Tilaiya UMPPs.