Reliance Power, Chinese firm ink $8.3-bn deal
Reliance Power and Chinese power equipment maker, Shanghai Electric (SEC) on Thursday signed an $8.29 billion agreement here for supply of 36 coal-fired plants that would have a combined capacity of 24,000 mw, in what is touted as the largest deal in the power generation sector.
Reliance ADAG group chairman Anil Ambani called the deal ‘historic’ and expressed the hope that it would help Reliance Power to emerge as ‘the most valuable power company in India in the coming years.’
SEC president Zheng Jianhua said that the company was planning to set up an equipment manufacturing facility in India through the joint venture route.
He refused to set a timeframe for it or reveal the size of the project, but said the move followed a re-thinking on the whole model of investing in India. “We are doing the due diligence. We have the options of entering India directly or through a partner. If we opt for the partner route, Reliance Power would be the first we would consider,” he said.
The Chinese company has already supplied 6,000-mw equipment to Reliance Power’s Sasan, Rosa and Butibori projects under a 2008 deal. With Thursday’s deal, the engagement between the two companies would be of the order of $10 billion. The 36 units of 550 mw would be used by the Reliance Power’s upcoming projects, including the ultra mega ones at Krishnapatnam and Tilaiya. The financing for the boiler, turbine and generator (BTG) packages, including super critical technology, would be done by Chinese institutions Bank of China, China Development Bank, Industrial and Commercial Bank of China and Export Import Bank of China. Reliance Power and SRC signed an memorandum of understanding (MoU) to cover the financing for Chinese exports up to $12 billion to India.
Source – Financial Express