The Uttar Pradesh government has in-principle decided to set up a 2,000 mega watt thermal power project in Bargarh region of the state, official sources said here today.

"A proposal to this effect was discussed during a meeting of the Energy Task Force chaired by chief secretary Atul Kumar Gupta yesterday and in principle it was decided to set up a 2,000 MW plant in Bargarh area of Chitrakoot," they said.

It has been planned that the project would be set up either by state utility UP Rajya Vidyut Utpadan Nigam or by a private player.

Initially, the National Thermal Power Corporation (NTPC) had proposed to set up a 4,000 MW plant in Bargarh at an investment of Rs 24,000 crore, but the project ran into rough weather following differences with the state government over certain issues.

NTPC officials had alleged that the state was not willing to make land and water available for the project.

"UP wants 100 per cent of the power generated by the project, but under the rules not more than 50 per cent of the power can be supplied to the state where the plant is situated," NTPC's regional executive director I B Pandey said last month.

He said that NTPC may set up the plant in Madhya Pradesh where the government was ready to provide land and water.