Reliance Power on Thursday awarded an $8.2-billion contract to the Shanghai Electric Group, one of China's biggest power equipment manufacturers, to supply 36 coal-fired generators. The order, officials said, was the biggest ever deal between Indian and Chinese companies in any sector.
Reliance Power said in a statement the order included 30,000 MW of boiler, turbine and generator packages for its coal-powered plants. The company described the order as possibly the largest ever deal signed in the power generation sector in the world.
Anil Ambani, Chairman of the Reliance ADA group, is in Shanghai this week.
He met his Shanghai Electric counterpart Xu Jainguo on Thursday, and is also scheduled to meet Shanghai's Communist Party chief Yu Zhengsheng. Shanghai Electric said in a statement to the Hong Kong stock exchange that the contract was for 36 coal-fired generators worth $8.2 billion. The generators will be supplied to Reliance Power over a decade, and bring in $600 million in sales annually.
Reliance Power officials said the company had, in addition, placed orders for six units, taking the total amount close to $10 billion. The two companies also signed an MoU to finance the deal, tying up with China's EXIM bank and the Industrial and Commercial Bank of China. The MoU will provide financing to cover exports up to $12 billion, the statement from Reliance Power said.
Shanghai Electric would also explore setting up facilities in India for manufacturing boiler, turbine and generator equipment, and had agreed to provide support for the operation and maintenance of the equipment, the long-term supply of spares and training manpower. In recent years, Shanghai Electric has sought to push its overseas ventures, which only account for 16 per cent of its revenues. Energy equipment makes up 70 per cent of the group's sales.
