Areva makes nuclear deal with Delhi

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PARIS: French nuclear giant Areva signed a preliminary deal on Wednesday to provide India with up to six new-generation nuclear reactors, expanding the list of countries that are adopting the technology in response to skyrocketing energy demand.

The Paris-based company says the deal signed with Indian electric utility Nuclear Power Corporation of India Limited (NPCIL) will pave the way for technical co-operation on at least two and as many as six of Areva's so-called EPRs, or Evolutionary Power Reactors, at the Jaitapur site in the western state of Maharashtra. India has refused to sign non-proliferation agreements and had faced a nuclear trade ban since its first atomic test in 1974.

In September, the countries that supply nuclear technologies agreed to lift the ban, paving the way for lucrative contracts with India.

Areva's statement didn't provide the estimated value of the deal.

Areva will supply two European Pressurised Reactors of 1650 MW each for nuclear plants the French company will build at Jaitapur in the western state of Maharashtra.

The Memorandum of Understanding for building nuclear plants was signed by SK Jain, chairman and managing director Nuclear Power Corporation of India and Anne Lauvergeon, CEO of Areva.

"This is just the beginning," said Anil Kakodkar, chairman of the Atomic Energy Commission who was present at the signing ceremony along with Prithviraj Chavan, Minister of State in the PMO and Anne-Marie Idrac, French Minister for Foreign Trade.

Lauvergeon said the Areva was committed to supply fuel for the lifetime of the reactors, which she pegged at about 60 years.

She said Areva will meet the fuel requirements through its uranium mines located in various countries, including Australia, Kazakhstan and Niger. Though the MoU provides for supply of two nuclear reactors, the order may be stepped up to six at a later date.

All the reactors will be located in a nuclear park Areva has been tasked to develop at Jaitapur.

The cost of one EPR has been estimated at between 5.2 and $7.8 billion, although final costs are subject to negotiation.

The signing of the MoU signals end of India's nuclear isolation and its emergence as a responsible nuclear state, Chavan said.

He said the MoU will pave way for technology collaboration in the nuclear sector and India seeks to enhance significantly its electricity generation capacity.

"We need to quadruple power generation as the nation would require about 63 Giga Watt electricity by 2032," Chavan said.

NPCIL, which currently operates 17 nuclear power reactors with a 4120 MW capacity, hopes to step up atomic power generation to 20,000 MW by 2020.

Currently, EPR-type of reactors are under construction in Finland, China and France.

In December, India signed a contract with Areva for importing 300 tonnes of natural uranium. This is the first commercial agreement for supply of nuclear reactors after India got the historic waiver from the Nuclear Suppliers Group (NSG) to participate in global nuclear commerce in September last year.

Since then, India has signed inter-governmental civil nuclear co-operation agreements with France, Russia, the US and Kazakhstan.

Once the India-specific safeguards agreement with the IAEA, signed in Vienna on Tuesday, is ratified, nuclear fuel supplied by Areva will be used in Rajasthan Atomic Power Station units, two of which are already under safeguards for the last three decades.

The nuclear trade embargo was enforced on India after it conducted nuclear tests in 1974.

The Areva-designed pressurised water reactors, which are meant to replace aging reactors around the world whose designs date from decades ago, are already under construction in Finland, France and China.

Areva also has plans to build the new reactors in Britain and the United States, company spokeswoman Patricia Marie said.

NPCIL already has five reactors under construction, which will increase its electricity generating capacity by 2,660 megawatts, from 4,120 megawatts currently.

It operates all of India's 17 existing nuclear reactors.