News: Reliance Energy plans $13 bln projects

(RTR 07/06/2006) Mumbai - Reliance Energy Ltd. is pursuing power projects worth 600 billion rupees ($13 billion) and plans a foray into nuclear energy, Chairman Anil Ambani told shareholders on Wednesday.

Reliance Energy, which generates about 941 megawatts of power, is among many Indian and foreign companies that are making huge investments in the power sector in India.

India's rapidly growing economy is currently hobbled by severe power shortages. India has embarked on an ambitious plan that aims to add 100,000 megawatts of power generation capacity by 2012.

Reliance Energy's investment will include hydro, gas-fired and thermal power totalling 16,000 megawatts, Ambani said.

"Reliance Energy is also keen to foray into nuclear power generation, as it has good experience in engineering and designing for nuclear power plants," Ambani said.

The company is interested in setting up a 2,000 megawatt nuclear power project, he said. Last week, Reliance had proposed to form a joint venture with state-run Nuclear Power Corp. of India Ltd. for the project.

Reliance Energy is part of Anil Dhirubhai Ambani Group, controlled by Anil Ambani who broke away from elder brother Mukesh, chairman of Reliance Industries Ltd., India's leading private sector conglomerate.

Shares in Reliance Energy, which has a market capitalisation of $2.1 billion, fell 5 percent to 403.90 rupees in a weak Mumbai market.

Reliance Energy's rival Tata Power Co. Ltd. announced plans last month to increase its generating capacity by more than 4,500-megawatts from 2,300 megawatts with an investment of 180 billion rupees ($3.9 billion).

Reliance Energy is building the world's largest gas-fired power plant, worth about $3.45 billion, in Dadri in Uttar Pradesh.

When fully commissioned, the project is expected to produce 7,480-megawatts of power, large enough to light up a city three times the size of Mumbai, India's commercial capital.

The company also has plans to set up a 4,000-megawatts gas-fired power plant in Maharashtra, and another 280 megawatts hydro power project in northern India.

It has signed preliminary agreement to set up two hydro power projects of 1,000-megawatts and 700-megawatts in Arunachal Pradesh.

Ambani said Reliance Energy is in the fray for the Indian government's plans to set up new power projects. India in January invited expressions of interest for setting up five power projects, each of 4,000 megawatts capacity.

Reliance Energy has also expressed interest in setting up a 3,500-megawatt power project in Sasan in central India and another 3,800-megawatt project in Gujarat.

Ambani said Reliance Energy was involved in rural electrification and had, earlier this year, won contracts worth 7.90 billion rupees to electrify 17 districts in Uttar Pradesh.

"Of the 7,220 villages, about 2,500 have already been electrified and work would be completed by early 2007," he said.