Ambani invests in Gates-funded nuclear company

Mumbai: Reliance Industries Ltd., operator of the world's biggest oil refinery complex, has invested in Terra Power LLC, a nuclear design and engineering company partly funded by Microsoft Corporation Chairman Bill Gates.

The minority investment was made through a unit and is one of various in the "broader energy sector," Reliance said in a statement yesterday.

The Mumbai-based energy explorer and refiner, controlled by billionaire chairman Mukesh Ambani, didn't disclose the size of the investment.

Gates, ranked the world's second-richest man in March by Forbes magazine, visited China this month to promote a new technology for fourth-generation nuclear reactors developed by Terra Power. Reliance, India's biggest company by market value, is seeking to widen its businesses as slowing economic growth globally cuts fuel demand and as output from India's biggest natural gas deposit declines.

"Reliance has been constantly trying to diversify, they want to be in the whole energy chain," said U.R. Bhat, managing director of Dalton Capital Advisors India Pvt. in Mumbai. "In the state they are now, they have to invest in businesses with big potential and nuclear has that potential. Nuclear is seen as the energy of the future and it's going to play a huge part."

Share value dives

Reliance had Rs614.9 billion (Dh42 billion) in cash and equivalents as of September 30. Falling gas output has driven the company's shares 29 per cent lower this year, the worst decline since 2008.

Terra Power, based in Bellevue, Washington, counts Gates and Khosla Ventures, backed by venture capitalist Vinod Khosla, among its investors, according to its website. The company is designing a nuclear reactor that uses low-enriched uranium and produces less waste.

Development of Terra Power's "travelling-wave reactor" may require an investment of $1 billion (Dh3.67 billion) in the next five years and they will cost "billions" to build, according to Gates, 56, who spoke to China National Nuclear Corp. about the new nuclear technology during his visit on December 7.

The "new approach" to nuclear power is still at an early stage and its adoption won't move fast, Gates said.

Efficient reactor

The reactors need uran-ium to start up and can "run for decades on depleted uranium" without enrichment or reprocessing, Terra Power said on its website.

Reliance, which owns chemical plants, fuel outlets and a retail-store chain, is diversifying from its energy business in India to telecommunications, hotels and financial services.

The company bought shale gas acreages from three companies in the US last year and plans to buy assets in Canada.

Bank of America Corp. picked Ambani to join its board as the lender sought to expand revenue from outside the US, the North Carolina-based bank said on March 16.