L&T ties up with Mitsubishi to make power equipment
Larsen & Toubro (L&T), India’s largest engineering and construction company, has formed a joint venture with Japan’s Mitsubishi Heavy Industries to make steam turbines and generators for the power sector.
By TNN |
MUMBAI: Larsen & Toubro (L&T), India’s largest engineering and construction company, has formed a joint venture with Japan’s Mitsubishi Heavy Industries to make steam turbines and generators for the power sector. The joint venture, with a capital outlay of about Rs 880 crore, will cater to power plants with a capacity of 500MW to 1,000MW.
“L&T was in talks with another Japanese company Toshiba for the super critical turbines. But those talks failed to get through and L&T found the tie up with Mitsubishi to be financially feasible,” said sources close to the development.
Meanwhile, Toshiba has agreed to supply Tata Power five 800MW steam turbine generators for its 4,000 MW ultra mega power project at Mundra in Gujarat, the sources added.
Mitsubishi will hold a 49% equity stake in the joint venture with L&T. Both companies will invest Rs 300 crore each as equity and the remaining amount will be raised as loan. The joint venture plant is expected to come up at Hazira in Gujarat and will start production in 2008-09, said company sources.
L&T Power Projects, a unit of L&T, which signed the agreement with Mitsubishi, already has a similar joint venture with Mitsubishi for boilers. Recently, it had been shortlisted to bid for the ultra mega power project at Krishnapatnam in Andhra Pradesh, along with Reliance Energy and Sterlite Industries.
L&T has been looking for a partner with modern, advanced technology and one that is willing to invest in India. Mitsubishi, on the other hand, had been seeking a presence in the country’s power generation and equipment sector.
According to the 11th Five Year Plan, India is planning to add 78,000MW of electricity.
About 60% of the new power projects are coal-based, which will give great opportunities for the turbine and boiler makers.
“L&T was in talks with another Japanese company Toshiba for the super critical turbines. But those talks failed to get through and L&T found the tie up with Mitsubishi to be financially feasible,” said sources close to the development.
Meanwhile, Toshiba has agreed to supply Tata Power five 800MW steam turbine generators for its 4,000 MW ultra mega power project at Mundra in Gujarat, the sources added.
Mitsubishi will hold a 49% equity stake in the joint venture with L&T. Both companies will invest Rs 300 crore each as equity and the remaining amount will be raised as loan. The joint venture plant is expected to come up at Hazira in Gujarat and will start production in 2008-09, said company sources.
L&T Power Projects, a unit of L&T, which signed the agreement with Mitsubishi, already has a similar joint venture with Mitsubishi for boilers. Recently, it had been shortlisted to bid for the ultra mega power project at Krishnapatnam in Andhra Pradesh, along with Reliance Energy and Sterlite Industries.
L&T has been looking for a partner with modern, advanced technology and one that is willing to invest in India. Mitsubishi, on the other hand, had been seeking a presence in the country’s power generation and equipment sector.
According to the 11th Five Year Plan, India is planning to add 78,000MW of electricity.
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About 60% of the new power projects are coal-based, which will give great opportunities for the turbine and boiler makers.
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