Anil Ambani’s Reliance Infrastructure (RInfra) is to sign a joint venture (JV) agreement with Shanghai Electric Corporation (SEC). The JV will set up a $3 billion facility to manufacture power equipment in India.
Later, they will set up four more JVs to offer a range of services to power projects. These will include technical and design support, operations and maintenance, erection of power equipment and after-sales care. The four JVs will have an aggregate investment of up to $600 million. The power equipment JV will be signed by Ambani and SEC group chairman Xu Jianguo on Monday. It will leverage growing demand at home and in neighbouring markets.
This is a backward integration in Ambani’s power business. According to people in the know, the power equipment JV will begin producing in 2010 and have a capacity to manufacture equipment for generating 10,000 mw.
RInfra’s business spans engineering, procurement and construction (EPC), power distribution and generation. Its EPC order book has over Rs 21,000 crore worth of contracts. It is implementing several power projects, including the ones at Yamuna Nagar and Hissar in Haryana (combined capacity of 3,500 mw) and is carrying out electrification of about 7,000 villages in Uttar Pradesh. It has the EPC contract for Reliance Power’s Sasan mega power project.
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