State-owned gas utility GAIL India Ltd has signed an agreement with Bharat Heavy Electricals Ltd (BHEL) for cooperation in the development of solar power projects.

“GAIL shall be the project developer and BHEL shall act as an engineering, procurement, construction and project management contractor,” the company said in a statement. BHEL shall also provide operation and maintenance services during the initial period upon becoming successful bidder.

“This development will help both the companies to leverage their competitive strengths to build a substantial portfolio in solar power projects. The memorandum of understanding (MoU) aims at building a closer strategic partnership between the two Maharatna PSUs for jointly pursuing commercial solar power projects through participation in tariff / Viability Gap Funding (VGF) based competitive bidding process,” it said.

GAIL is India’s biggest natural gas company with diversified interests across the value chain of trading, transmission, LPG production and transmission, LNG re-gasification, petrochemicals and city gas.

“GAIL is also expanding its presence in renewable energy like solar and wind. It has India’s second-largest rooftop solar PV power plant at its petrochemical complex at Pata, Uttar Pradesh,” the statement said.

BHEL is one of the few companies in the world, and only company in India, having the capability to manufacture the entire range of power plant equipment. It has also been in the field of design, engineering, manufacturing, installation, and commissioning of solar power plants over three decades and has a portfolio of more than 700 MW.

In January, BHEL won an order for setting up 129 MW Solar Photovoltaic (SPV) power plants in Telangana from Singareni Collieries Company (SCCL). Significantly, valued at Rs 565 crore, this is the largest SPV power plant order won by BHEL till date.

The plants are to be set up at four locations in Telangana – Ramagundam (50 MW), Yellandu (39 MW), Manuguru (30 MW) and Pegadapally (10 MW). The scope of work includes design, development, supply, installation, and commissioning of the project on an Engineering, Procurement, and Construction (EPC) basis.

In March, the PSU invited quotations from eligible bidders for 2.5 MVA Inverter Transformers for its 129 MW solar power plant under development in Telangana for SCCL.