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POWER solutions provider Thermax has said that it has signed an agreement with US-based Babcock & Wilcox Power Generation Group, for forming a joint venture to manufacture supercritical boilers for the power sector.

   Pune-based Thermax will own 51% stake while its US partner will control the remaining 49% stake in the venture which will have an initial annual capacity of 3,000 megawatt equivalent. The supercritical boilers will be manufactured in a new facility that is being planned.

   The plant will indigenise the technology and contribute to local component development, said the companies in a joint statement. The venture will have an initial capital of Rs 700 crore, split equally between equity and debt.

   Thermax will chip in Rs 175 crore as its equity contribution to the project from its cash reserves, its managing director & CEO MS Unnikrishnan told reporters.

   “We are proud to offer the services of this JV to support the government's initiatives to improve the power scenario in India. And we are happy that Babcock, our joint venture partner, is a global technology leader whose boilers generate over 300,000 MW of power around the world,” said Mr Unnikrishnan. The venture will also cater to the needs of supercritical and sub-critical boilers with capacities of 300 MW.

   The government wants to produce a majority of the proposed capacity addition of 100,000 MW by super-critical technology which costs less and is more environment friendly. Supercritical boilers operate at high pressures increasing efficiency and producing more energy from the same amount of fuel. They also cause less harm to the environment. Shares of Thermax rose 3% to end at Rs 672.85 on a day when the broader index was flat. Thermax and Babcock have had a business relationship for over 20 years. Thermax had signed a technology transfer agreement with Babcok for manufacturing subcritical power boilers two years ago. "This JV augments Babcock's presence and profile in the global marketplace and presents a substantial opportunity to continue the growth of its business in India and around the world," said Babcock president Richard L. Killion.

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