India's top oil and gas producer ONGC and country's biggest electricity generator NTPC have signed a preliminary agreement to set up a joint venture company for renewable energy projects.

Oil and Natural Gas Corp (ONGC) and NTPC Ltd "entered into a memorandum of understanding (MoU) on May 21, 2020 in New Delhi to formalize this arrangement," ONGC said in a statement.

The MoU will enable both companies to achieve their respective targets in renewable energy business.

"As per the MoU, NTPC and ONGC will explore and set up renewable power assets including offshore wind, in India and overseas, and explore opportunities in the fields of sustainability, storage, e-mobility and ESG (Environmental, Social and Governance) compliant projects," the statement said.

ONGC has a renewable portfolio of 176 MW comprising of 153 MW wind power and 23 MW of solar plants.

Through this collaboration with NTPC, ONGC envisages significant growth in its presence in the renewable power sector.

ONGC's Energy Strategy 2040 document calls for the company to invest in renewable energy sources with a target to create 5-10 gigawatts portfolio with a focus on offshore wind power.

NTPC, with a 920 MW of installed renewable power capacity in its portfolio with about 2,300 MW of renewable energy projects under construction and aspiring to reach 32 GW by 2032, will benefit from this tie up by expanding its footprint in offshore wind and overseas renewable energy projects as well, the statement added.

The MOU was signed by ONGC Director (Finance) and In-charge Business Development and Joint Ventures Subhash Kumar and NTPC Director (Commercial) A K Gupta. ONGC Chairman and Managing Director Shashi Shanker and NTPC head Gurdeep Singh (on virtual conferencing) along with the directors of two public enterprises witnessed the occasion.