Reliance Energy has pipped Essar to emerge as the top contender for the Rs 500 crore (Rs 5 billion) Koldam transmission project of Power Grid Corporation of India.

The project is to be executed through a joint venture where Power Grid would be a minority stakeholder. While the evaluation committee has shortlisted Reliance Energy as the top contender based on technical and financial parameters, the decision would require approval from the Power Grid board.

While Reliance Energy had evinced interest in picking up 74 per cent stake in the joint venture, Essar intended to acquire 51 per cent stake.

Power Grid executives said that Essar's lack of experience in the transmission business went against it. Reliance and Essar were the only two companies in the fray for the project, which would be the second joint venture project after the Power Grid-Tata Power joint venture, Telelinks, for evacuating electricity from the Tala project in Bhutan.