Kalyani Group flagship Bharat Forge Limited (BFL) proposes to enter into an alliance with a Europe-based company of the Alstom Group for the manufacture of critical components for thermal power plants.

The companies will sign a deal on 10 November and details of the joint venture agreement will be announced after the event.

The joint venture, estimated to coast 0ver Rs1,000 crore, will invest in a manufacturing facility with an annual production capacity of 5,000 MW, Bharat Forge said in a filing with the Bombay Stock Exchange.

The proposed joint venture project, which will produce high-value, super-critical turbine/generator sets for thermal and nuclear power plants, will be subject to receipt of applicable government and regulatory approvals, BFL said in a statement.

Initially, the European arm of Alstom would produce equipment for thermal plants and provide nuclear power generation equipment later when the sector opens up in the country, the BSE filing said.

This is part of the company's planned entry into the capital goods sector, said Baba Kalyani, chairman and managing director of BFL.

The joint venture would be headquartered in New Delhi. Kalyani, however, refused to disclose details about the joint venture agreement.

He said the manufacturing plant would be located near a port to facilitate transportation since the components could weigh upwards of 1,000 tonnes. ''We have not finalised whether it will be on the West coast or the East coast as yet,'' he said.

Kalyani had earlier identified either Gujarat or Visakhapatnam as possible locations for the greenfield plant which is expected to go on stream in three years and involve an investment of Rs1,000-1,200 crore over a five-year period.

When ready, the JV is expected to give a big boost to the country's power generation capacity at a time when the government plans to add around 92,000 MW generating capacity

Bharat Forge, which manufactures various forged and machined components for the automotive and non-automotive sector, is today among the largest and technologically most advanced manufacturers of forged and machined components. The company has manufacturing operations across 12 locations and 6 countries - 4 in India, 3 in Germany, one each in Sweden, Scotland, USA and 2 in China.