New Delhi, Feb 6: LNJ Bhilwara Group on Wednesday announced setting up of a 60:40 joint venture with Iceland-based Glitnir Bank to develop geothermal power plants in India and Nepal.

"The JV with the authorised capital of $10 million would set up such plant in the next couple of years," LNJ Bhilwara Group Chairman Ravi Jhunjhunwala told reporters.

The North European bank will put in $4 million along with the technology for generating renewable energy contained in underground reservoirs of steam, hot water, and hot dry rocks, he said.

Geothermal energy is defined as heat from the core of the Earth. It is considered a renewable source because the heat emanating from the interior of the Earth is essentially limitless. It is estimated to be equivalent to 42 million megawatts of power.

The company is yet to identify the location but such a potential exists in Andaman and Nicobar Islands, Kashmir, Ladakh and Chhattishgarh, he said.

Typically, such a plant generates about 30-50 MW, which requires an initial investment of $300 million, he added.

Commenting on the JV, Glitnir Bank CEO Lrus Welding said the bank will also be bringing strategic investors to raise capital during different phases of the development of the geothermal plant.

Besides, the bank is in the process of filing the application with RBI to open a representative office in Mumbai and also looking at seafood and offshore service vessels opportunity in the country.