French group Areva on Wednesday signed a draft accord for the sale of two to six nuclear reactors to India, a huge new market now open with the end of a nuclear trade embargo on New Delhi. The memorandum of understanding also covers the potential supply by Areva of fuel during the life of the reactors, slated to be built in Jaitapur in the western state of Maharashtra, home to India's financial capital Mumbai.
"India is expecting a lot because of its huge needs in terms of energy," Areva chief executive Anne Lauvergeon told reporters in New Delhi. "We have to deliver what we have agreed. We are deeply committed. India is a first-tier partner and customer." The accord with the state-run Nuclear Power Corporation of India Limited covers two to six European Pressurised Reactors (EPR), which cost an estimated four to six billion euros (5.2-7.8 billion dollars) each.
"Of these six reactors, two should be ordered this year," Lauvergeon told AFP. A 34-year-old embargo on civilian nuclear exchanges with India, imposed in 1974 following a series of Indian nuclear tests, was lifted last year after years of negotiations between India and the United States. France in September signed an agreement with India covering nuclear energy co-operation, while Russia has signed a similar accord.
India currently has 17 nuclear reactors in operation that supply a mere 2.5 percent of the country's electricity. By 2020, that figure is expected to rise to four to five percent. The gap between electricity supply and demand nation-wide averages up to 16 percent at peak times, according to government figures, and 25 percent according to industry estimates.
And according to the Planning Commission of India, around 600 million people - more than the entire population of the European Union and about half India's people - are not even on the national grid. India, the world's 10th leading economic power and dependent on oil imports for 70 percent of its energy needs, is seeking an additional 60,000 megawatts of nuclear energy, which would require investment of about 100 billion euros over the next 20 years.