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New Delhi: NTPC Ltd., India’s biggest electricity producer, is seeking to buy the federal government’s stake in hydro-power producer SJVN Ltd. to boost the share of non-fossil fuel generation capacity, people familiar with the development said.

New Delhi-based NTPC has written to the finance ministry’s Department of Investment and Public Asset Management proposing to buy India’s stake in SJVN, the people said, asking not to be identified as the matter isn’t public. India owns about 64.5% in the hydro-power generator. It is valued at about Rs8,720 crore ($1.3 billion), according to Bloomberg calculations.

The stake purchase will aid state-run NTPC meet its goal of reducing the share of its generation capacity not relying on fossil fuels to 70% by 2032 from about 97% now. It will also help India raise funds for the national exchequer and narrow its fiscal deficit.

Also Read: Teva Pharmaceutical to cut up to 6,000 jobs: report

Press officials from NTPC and India’s finance ministry declined to comment, while SJVN chairman R.N. Misra couldn’t immediately comment, according to an official at his office.

SJVN shares jumped on the news, rising as much as 6.4% to Rs34.70, the biggest intraday increase in more than two months. They traded at Rs32.75 as of 1:18pm in Mumbai on Thursday. Bloomberg

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