Oil major Hindustan Petroleum Corporation Ltd (HPCL) has signed a memorandum of understanding (MoU) with the Government of Chhattisgarh and Chhattisgarh Renewable Energy Development Agency (CREDA) for forming a joint venture company to undertake Jatropha plantation on more than 15,000 hectares of land in the state.

CREDA is a state government body under Department of Energy (DoE) constituted for the development of renewable energy sources in the state of Chhattisgarh. It will be responsible for obtaining wasteland for plantation of Jatropha from the Government of Chhattisgarh under the project.

Under the agreement, the entire yield of Jatropha seeds from 15,000 hectares of land would be sold exclusively to HPCL - which will in turn produce bio-diesel through suitable chemical processes and market the product through a network of retail outlets across the state.

HPCL will acquire 74% stake while CREDA will hold 26% equity stake in the JV company. HPCL has already carried out successful extensive field trial of bio-diesel on 25 BEST buses in Mumbai.