India's ADAG awards power equipment deal to Shanghai Electric

Oct 28, 2010 12:00 AM

Shanghai Electric Group has won a $ 8.29 bn deal to supply power equipment to Indian billionaire Anil Ambani's Reliance Group.

Shanghai Electric, the largest power producer in Shanghai, said that it will sell 36 coal-fired thermal power generation units, spare parts and related services to Reliance ADA Group (ADAG) over a 10-year period.

It will deliver three to four of these power generation units each year, which will bring as much as $ 600 mm in annual sales revenue each year, or about 6-7 % of its total revenue for 2009, Shanghai Electric said.

Shanghai Electric, led by Xu Jianguo, said it will sign the deal with Reliance's Ambani later, adding that the deal will help lift its market share in the Indian power-equipment market.

Shanghai Electric and Reliance Infrastructure already have a close working relationship, with the Chinese firm having supplied equipment to other power projects. The two also set up a $ 3 bn joint venture in 2008 to manufacture turbines and generators in India.

India, the world's sixth-largest energy consumer, has set an ambitious target of lifting its generation capacity to 100,000 MW during 2012-17 and plans to spend $ 1 tn on infrastructure during the period.

The country is expected to add only about 62,000 MW in the current five-year period, compared with the target of 78,000 MW. About 84 % of Shanghai Electric's revenue came from China last year and just over 16 % from overseas. The company posted a 33.2 % rise in its third-quarter profit from a year earlier.

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