Tata Power Co. Ltd. reached an exploratory agreement with the government of Tamil Nadu to invest an estimated 708 billion rupees ($8.5 billion) in clean energy projects, as the company seeks to decarbonize its generation capacity.

The firm signed a preliminary deal with the southern Indian state to build 10 gigawatts of renewable energy projects and expand an existing plan for solar panel manufacturing to 4.3 gigawatts of capacity, it said in a filing Tuesday.