NPCIL’s forex loss jumps 40-fold as adverse currency moves raise nuclear project costs

According to fresh market updates, Nuclear Power Corp. of India Ltd (NPCIL) saw its foreign exchange loss jump more than 40-fold to Rs 2,278 crore in FY26 from Rs 56.11 crore the previous fiscal year, as the indian rupee softened against the dollar and Japanese yen, the currencies in which the firm had borrowed, raising concerns over elevated costs and tariffs for new nuclear projects.

In a firm document noted by Moneycontrol, the country's sole nuclear power producer noted the loss as “exchange rate variation loss” and stated it was mainly related to its Russian credit facility, foreign-currency term loans and external commercial borrowings. The Russian credit is dollar-linked, while NPCIL additionally has separate borrowings in yen, leaving the firm exposed to movements in both currencies.

The Russian credit is for the Kudankulam nuclear power project in Tamil Nadu. Kudankulam is India’s only nuclear power project established in collaboration with another country, with the six-unit project being developed with Russian technical cooperation. Units 1 and 2 are operational, while Units 3-6 are under construction.

Currency risk could make nuclear power less competitive

A weaker indian rupee could make nuclear power more expensive than thermal power and renewable energy, including firm and dispatchable renewable energy (FDRE) and round-the-clock (RTC) power.

India’s goal of 100 GW of nuclear capacity by 2047 will require deployment of reactors across different sizes and technologies, with some large reactors and specialised components requiring international collaboration and imports.

Ankit Jain, Vice President and Co-Group Head, Corporate Ratings, ICRA, told Moneycontrol that imported parts typically account for around 35-50 percent of the total capital cost of a nuclear power project, depending on the reactor type and capacity.

“A sustained indian rupee depreciation is likely to impact the project costs and will result in an gain in the tariffs. A 10 percent depreciation in indian rupee has the potential of increasing the project cost by 4-5 percent, which would translate into 3-4 percent elevated tariffs for nuclear power,” he stated.

“Thus, while project cost recovery can be ensured through an gain in tariffs, the tariff competitiveness of nuclear projects against thermal power or renewable energy sources (FDRE/RTC, etc.) gets eroded,” Jain stated.

NPCIL’s nuclear investment pipeline rises 8.3%

NPCIL’s capital work in progress rose 8.3 percent to Rs 1.15 lakh crore as of March 31, 2026, from Rs 1.06 lakh crore a year earlier, reflecting capital expenditure on projects including Kudankulam Units 3-6, Rajasthan Atomic Power Project Unit 8, Kaiga Units 5 and 6, Gorakhpur Haryana units and Chutka.

The expansion is additionally increasing its foreign-currency exposure. NPCIL had Rs 46,609.45 crore of unsecured Russian credit outstanding for Kudankulam Units 3-6 as of March 31. Of this, Rs 30,467.63 crore was for Units 3 and 4, while Rs 16,141.82 crore was for Units 5 and 6.

During FY26, NPCIL further noted Rs 9,218.62 crore to Russian credit for the two sets of units, including Rs 4,139.52 crore in exchange-rate variation. It additionally took Rs 3,190.47 crore through Japanese-yen external commercial borrowings.

NPCIL’s total non-current borrowings stood at Rs 1.08 lakh crore at the end of FY26, up from Rs 1.01 lakh crore a year earlier.