India’s ministries of finance and power are discussing a plan to sell government’s stake in hydro-power producer NHPC Ltd. to its state-run peer NTPC Ltd., the nation’s biggest electricity generator by capacity, according to people familiar with the matter.

The government’s 73.67 percent stake in NHPC is worth about 182 billion rupees ($2.6 billion) as per current prices, according to Bloomberg calculations. Talks are at an initial stage and a deal is unlikely to be concluded this fiscal year, although the government plans to complete some formalities before March, the people said. NHPC surged as much as 9.7 percent before closing 3.9 percent higher at 24.15 rupees.

The discussions point to the government’s plans to consolidate state-run energy companies to give them global size and scale, apart from helping it to boost revenue collections and stick to its budget gap target. The sale, if approved, will be the second such consolidation after state-run Oil and Natural Gas Corp. acquired the government’s stake in oil refiner Hindustan Petroleum Corp. for 369 billion rupees.

The sale will boost NTPC’s green portfolio as the predominantly coal-burning generator makes a gradual shift away from fossil fuels. NTPC last year sought to acquire the federal government’s stake in another hydro-electricity generator SJVN Ltd., but it hasn’t been able to forge a deal yet. Press officials at the power ministry, NTPC and NHPC didn’t immediately respond to an email seeking comments, while two calls to finance ministry spokesman D.S. Malik went unanswered.