Power solutions provider Thermax and US-based power generation technology firm Babcock & Wilcox have formed a joint venture (JV) to make super-critical steam boilers for the domestic market with an initial investment of Rs 700 crore. Super-critical boilers are high-end heat equipment that have the ability to produce more heat per kilogram of coal burnt, therefore are cost-effective and environment-friendly.
The super-critical boilers will be manufactured at a new facility with an annual capacity of 3,000 MW. Thermax will hold 51% and Babcock & Wilcox will own the rest in the JV, which will also manufacture sub-critical boilers of more than 300 MW annual capacity.
Thermax managing director & CEO MS Unnikrishnan said, ?The funds for the venture will be split between 1:1 debt and equity. Thermax will infuse a little over Rs 175 crore into the venture and the debt portion will be tied up with banks that are willing to fund the project.? He further said that Thermax will offer the services of the JV to support the government?s initiatives to improve the power scenario of the country. Meanwhile, shares of the company closed the day at Rs 673, up 2.72% on the Bombay Stock Exchange on Wednesday.
The venture is being established at a critical time when India?s ambitious growth plans and its dependence on coal fired power plants for power throw up tremendous energy and environment challenges. In the context of emission reduction and the need to conserve fossil fuel, energy efficient power generation is a critical requirement. The government is planning to add capacity of 100,000 MW between 2012-17, a majority of which will be super-critical technology, fuelling demand for such high-end equipment.
The Thermax Group has an order backlog of Rs 5,613 crore as of December 31, 2009. Order booking for the December quarter was Rs 1,548 crore. During the quarter, among the orders received, there was an order of Rs 477 crore from a leading conglomerate in Orissa for constructing and commissioning a 2×60 MW power plant using washery rejects, Thermax said.
The Rs 3,300-crore Thermax offers energy and environment solutions and offers integrated, innovative solutions in the areas of heating, cooling, power, water and waste management, air pollution control and chemicals.
In August 2009, Thermax has formed a joint venture with diversified US manufacturer SPX Corp to provide air pollution control systems for power plants above 300 MW and energy efficiency equipment.