Reliance Infrastucture in $3-billion joint venture with Chinese Shanghai Electric Power

Anil Ambani promoted Reliance Industrial Infrastructure Ltd and Shanghai Electric Power Generation Group, are set to sign an agreement for setting up a $3-billion joint venture for power equipment manufacturing, making it one of the biggest tie-ups between a Chinese and an Indian company.

As per the agreement the 50:50 JV company will build a Rs12,000-crore plant with an equipment manufacturing capacity of 10,000 MW, rivalling that of public sector BHEL.

The new venture will supply equipment to Reliance Power that is executing Sasan and Krishnapatnam ultra mega power projects (UMPP) of 4,000MW capacity each at Madhya Pradesh and Andhra Pradesh, respectively.

Reliance Power had earlier selected  Shanghai Electric as its main equipment supplier for the Sasan UMPP. Shanghai Electric has in the past also supplied equipment to Reliance's Rosa power plant.

The joint venture plant is expected to go on stream by 2010 for which it proposes to raise around Rs 9,500 crore as debt particularly from foreign banks.

Reliance Power plans to develop a generation capacity of 30,000MW by 2017 and would serve as a buyer for this joint venture to ensure a that it has a steady supply of the required equipment.

The joint venture company will also supply equipment to domestic producers and firms in neighbouring countries.