Shanghai : Indian billionaire Anil Ambani's Reliance Power inked an $8.3 billion (Dh30 billion) deal with China's Shanghai Electric Group, a contract which both firms touted as the single largest business contract between the two nations.
Shanghai Electric will supply 36 coal-fired thermal power generation units to Reliance over three years, underscoring India's hunger for electricity as the nation looks to fix the frequent blackouts that have impeded economic growth.
India, which has one of the world's lowest power consumptions per capita, has set an ambitious target of lifting its generation capacity to 100,000 megawatts during 2012-17 and plans to spend $1 trillion on infrastructure during the period.
"We see a potential for a gamut of cooperation between the two countries," Anil Ambani, chairman of Reliance ADA Group, told reporters at a signing ceremony yesterday in Shanghai.
Vast demand
"India has vast needs for power and has one of the lowest power consumption rate per capita with no reliable steady source of power across the country," Ambani said.
Including previous orders, Reliance said it has signed around $10 billion worth of purchase orders with Shanghai Electric, adding it also signed memoranda of understanding with four major Chinese banks to cover the financing.
Shanghai Electric said it was also looking to set up a manufacturing facility in India as part of a strategy of expanding in India's fast-growing power market.
Zheng Jianhua, president of Shanghai Electric Power Generation Group, said the group was also in discussions with Reliance to supply equipment for other power sources, including nuclear and wind.
Shares in Reliance Power fell 2.4 per cent by 1302 GMT, while Shanghai Electric, which has a market value of $17 billion, rose as much a 7.4 per cent before closing up 0.2 per cent.
