Tata Power, India's largest private power producer, would soon hold discussions with Uttar Pradesh government about setting up a 1,000MW thermal power project estimated to cost around Rs 4,000 crore.

"We (Tata Power) have been invited by Uttar Pradesh government recently for a dialogue over the proposed mega power project," Anil Sardana, Chief Executive, North Delhi Power (NDPL), Tata Group's power distribution arm, said on Sunday.

The UP energy secretary had formally invited the company for a discussion on land allotment and other matters.

The move to hold talks with UP government assumes significance as Tata Power has become the second major power producer to look at the state following a decision in February by Reliance Energy to establish a mega project at Dadri.

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The group would seek around 100 acres of land for the greenfield venture for which it has identified several sites though Sardana did not reveal the locations.

The project, likely to be set up in phases, would supply a significant chunk of energy to Delhi where the company acquired a distribution circle in 2002 following privatisation of the Delhi Vidyut Board.

The company had a year ago proposed a 1,000MW project in the national capital but was frustrated by the Delhi government's tardy decision making. "It is strange for Delhi to show shyness in promoting private power generation, particularly when it had already privatised the distribution business," Sardana said.

Following the enactment of Electricity Act 2003, private power producers no longer require licences for establishing generation capacity.

At present, Tata Power has an established capacity of over 2,200MW. It is in the process of establishing the 330MW Srinagar Hydel Power Station in Uttaranchal after buying out the stake of the Duncans and Synergics Group.

It already distributes power in Mumbai and has shown interest in picking up other distribution circles as well.