Thermax has entered into a 51:49 joint venture (JV) with US-based Babcock & Wilcox

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Power Generation Group Inc (B&W PGG), a global leader in power generation industry - to engineer, manufacture and supply supercritical steam boilers over 300 mega watt (MW) for the Indian power sector. The two companies will invest Rs 700 crore in the project.

“The JV will be investing Rs 700 crore in setting up a greenfield facility with an annual production capacity of 3,000 MW supercritical steam boilers,” M S Unnikrishnan, MD and CEO, Thermax said.

The two companies have agreed for a 1:1 debt–equity ratio for the investments to be made in the new plant. Thermax is also in talks with banks and financial institutions to raise around Rs 175 crore as debt for the project, Unnikrishan said.

“The supercritical boilers can operate at higher pressures than subcritical boilers and increase efficiency, produce more energy from the same amount of fuel. These products are ideal for the upcoming ultra mega power projects in the country,” said Richard L Killion, president and chief operating officer, B&W PGG.

Thermax has expertise in developing sub-300 MW boilers, whereas B&W PGG has mastered in developing big size supercritical and subcritical boilers in range of 300 MW to 800 MW power generations.

“The plant, with an annual capacity of 3,000 MW equivalents in the first phase will indigenise the technology and promote localisation of components,” Ravinder Advani, executive vice president, Thermax, said.

Thermax has a JV with Babcock & Wilcox International Investments dating back to 1988, focusing on the growing boiler market in the country.

According to the target set by the ministry of power for the 11th Five-Year Plan, there will be capacity addition of 78,700 MW from central, state and private sector.

Around 19,092 MW has been commissioned till December 31, 2009, while 43,282 MW is under construction, including central, state and private sector.

Killion further said that the JV’s focus would be companies like Tata Power and Adani Power among others, who are setting up ultra mega power plant.

Around 14,800 MW capacity will be added by private sector companies, the ministry had said earlier.

“We have identified three-four places, but are yet to finalise a location. The plant is expected either in Gujarat or Maharashtra,” Unnikrishnan said.

Thermax - Babcock Wilcox Power Generation Group will require around 100 acre of land to set up the 3,000 MW plant.