R Power cuts a record deal
In a landmark agreement that could take the business relationship between Indian and Chinese companies to the next level, the Anil Ambani-managed Reliance Power announced on Thursday that it has placed a $10 billion (R44,500 crore) order with Shanghai Electric Group Co Ltd (SEC) for procuring equipment for its power projects in India.business Updated: Oct 28, 2010 22:52 IST
In a landmark agreement that could take the business relationship between Indian and Chinese companies to the next level, the Anil Ambani-managed Reliance Power announced on Thursday that it has placed a $10 billion (R44,500 crore) order with Shanghai Electric Group Co Ltd (SEC) for procuring equipment for its power projects in India.
The world’s largest order in power generation — and worth about 75% of the Anil Dhirubhai Ambani Group (ADAG) net worth — is for 30,000 MW capacity of boilers, turbines, and generators (BTG) for ADAG’s coal-based power plants.
The financing for the BTG packages would be provided by commercial banks, export credit agencies and/or other financial institutions in China.
“This is a historic day for Reliance Power...for its shareholders for its million customers,” ADAG chairman Ambani said in his address after signing the MoU with Shanghai Electric. “India is emerging as one of the most exciting markets for companies throughout the world.”
The two companies may also tie up for setting up a manufacturing facility in India. “We are doing studies and very soon we would take a final decision based on the due diligence for this (manufacturing unit),” SEC president Zheng Jianhua said.
While SEC is already supplying equipment to Reliance Power’s 4,000 MW Sasan Power project in Madhya Pradesh, this agreement would be for the company’s power projects at Krishnapatnam (Andhra Pradesh), Tilaiya (Jharkhand), Chitrangi (Madhya Pradesh) and other expansion projects.
“The strategic cooperation between Reliance Power and leading global supplier like SEC will enable faster project execution of our projects,” said J.P. Chalsani, CEO, Reliance Power said. “SEC’s after sales support will ensure higher availability and assured maintenance support through the operating life of our projects.” Reliance Power’s shares ended down 2.4% at R154.
(The writer’s travel and accommodation for the trip was paid for by Reliance Power)
First Published: Oct 28, 2010 22:50 IST