Engineering and construction major Larsen & Toubro Ltd has signed a memorandum of understanding (MoU) with Russia's Atomstroyexport for designing and developing nuclear power reactors in India.
Under the agreement signed today, the companies will co-operate in designing and building reactors for the Indian market, including four for the ongoing Indo-Russian project at Kudankulam in Tamil Nadu.
The MoU was for the co-operation between the companies related to equipment and other services arising from the agreement signed between visiting Russian President Dmitry Medvedev and Prime Minister Dr Manmohan Singh in New Delhi on 5 December 2008, for four additional reactors KK3-6 at Kudankulam, Tamil Nadu and other Russian reactors at new sites in India (See: India-Russia nuclear agreement signed).
The companies will also cooperate in the construction of plants designed with Russian light-water VVER 1000 reactors at new sites in India, L&T said in a statement.
This MoU will enable L&T as well as ASE to utilise indigenous capabilities for nuclear power plants including supply of equipment and systems, valves, electrical and instrumentation products and fabrication of structural and piping and construction for the Russian VVER plants in India and in other global locations.
VVER reactors are already licensed and in operation in several countries and both L&T and ASE are optimistic about the emerging opportunities and see the possibility of future co-operation, in India as well as abroad.
Russia, the third country to sign a nuclear co-operation agreement with India after the United States and France, is already building two 1,000-megawatt light water reactors in Kudankulam.
Atomstroyexport has about 20 per cent of the global volume of nuclear reactor projects, the $7-billion L&T said in a statement.
"The memorandum of understanding will form the basis of cooperation between the two companies and address the needs for equipment and other services arising from the agreement signed between India and Russia on December 5, 2008," the statement said.
L&T has also signed preliminary agreements for building nuclear reactors with Atomic Energy of Canada Ltd and US-based Westinghouse Electric Co, which is owned by Japan's Toshiba Corporation.
The company is also in talks with Areva SA and General Electric Co for similar pacts.
Several Indian companies, including government-owned NTPC Ltd and Bharat Heavy Electricals Ltd are also exploring possible joint ventures with global firms such as GE and Siemens AG for nuclear reactor market.
India, like several other countries, is now under increasing pressure to add nuclear power generation capacity to meet a peak-hour shortage of 10-15 per cent.
Larsen hopes to emerge as an exporter of nuclear reactors and spares to other countries as and when these countries expand their nuclear power generating capacities. Larsen and Atomstroyexport will also work together in other countries, the statement said.
The MoU will also cover areas such as supply of equipment, systems, valves, electrical and instrumentation products, as also fabrication of structurals and piping.
The nuclear market in India, estimated to grow to $150 billion in the next 30 years and nuclear energy will play an important role in India's economic growth as well as delivering clean energy.
Nuclear power may generate as much as 10 per cent of India's electricity by 2030. India uses atomic energy for less than 3 per cent of its 147,402.81 megawatt electricity output.
According to the 11th Five-Year Plan targets, India aims to build 5,600 MW (8 X 700 MW) pressurised heavy water reactors, 1,500 MW (3X500 Mw) fast breeder reactors, 300 MW (1X300 MW) advanced heavy water (thorium) reactors and 10,000 MW (10 X1000 MW) light water reactors (LWRs). The target is to increase the share of nuclear energy in the energy basket from the current 4.1 per cent to 9 per cent in the next 25 years.
Atomstroyexport, which has over five decades of experience in atomic energy and construction of nuclear power projects, is also working on projects in China, Iran and Bulgaria.
Larsen and Toubro had touched an intraday high of Rs842.90 and an intraday low of Rs798.05. Share volumes rose to around 247,247 in late morning trade.