For the manufacture of critical components for thermal power plants, forgings major Bharat Forge Ltd (BFL) is proposing to form an energy joint venture with a Europe-based company of the Alstom Group.

Baba Kalyani, Chairman and Managing Director, BFL, described the move as a part of the company’s planned entry into the capital goods sector.

Informing the Bombay Stock Exchange about the JV – which will be signed in Delhi on November 10 – Forge said that a manufacturing facility with an annual production capacity of 5,000 MW will be set up. Furthermore, in the 11th Five Year Plan (2007-2012), a capacity of around 92,000 MW is to be added.

Though the joint venture would be headquartered in New Delhi, Kalyani said the manufacturing plant would be located near a port to facilitate transportation since the components could weigh upwards of 1000 tonnes. He added: “We have not finalized whether it will be on the West coast or the East coast as yet.”

Kalyani had earlier identified either Gujarat or Visakhapatnam as possible locations for the greenfield plant, which is expected to go on stream in three years. He said that over a five-year period an investment of Rs 1,000-1,200 crore will be involved in the venture.