GIANT SPAIN-INDIA TURBINE DEAL

Gamesa and Caparo announce strategic agreement for 2,000 MW supply
17 May 2011 (Gamesa)

"Gamesa, a global leader in wind turbine manufacturing and a benchmark in wind farm development…has signed a framework agreement with power company Caparo Energy India Limited (CEIL) to deliver turbines with combined capacity of 2,000 MW over the next five years.

"The deal, the largest one of its kind ever signed in India and one of the biggest in the wind energy market anywhere in the world, encompasses the delivery, installation and start-up of Gamesa's G58-850 kW and G97-2.0 MW turbines between 2012 and 2016. The contract calls for Gamesa to supply Caparo Energy with about 150 MW of turbine capacity in 2012."

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"Gamesa will produce the newly contracted turbines at its factories in India. The deal marks the first time that Gamesa will sell its G97-2.0 MW turbines in the country. The agreement is part of Caparo Energy's long term strategy to secure its supply of turbines at a preferential pricing…

"The deal represents a turning point in the Indian wind energy market and heralds further progress in the industry's rapid growth in India. Wind turbine capacity totalling 2.5 GW was installed in 2010, and the country's targets call for the installation of 5 GW per year through 2015. Forecasts suggest that combined installed capacity at wind farms in India may amount to 64 GW by 2020…The wind sector in India has been growing at 30% to 40% per annum in the past five years and the growth rate is expected to increase significantly in the coming years. Also, the future market will predominantly have more IPPs developing wind farms where the key drivers for the growth are higher IRR and tax incentives…"

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"In March, Gamesa announced…[it] will invest more than 60 million euros through 2012 to build new manufacturing plants to meet the growing demand in the country…[It will] open a turbine blade factory in Gujarat, with initial production capacity of 300 MW, and will continue with the localisation production of its G9X-2.0 MW…[as well as opening] new manufacturing plants in the country to produce nacelles and towers…[Its] nacelle manufacturing plant in Chennai…expanded more quickly than planned…to nearly 500 MW by the end of 2010…[Gamesa also] inaugurated its first technology centre in the country, in Sholinganullar, in Chennai.

"In the 1Q 2011, Gamesa's sales in India expanded 8-fold and accounted for 24% of the quarter's total…Gamesa has attained a market share of 10%) after just 18 months in India, placing it the third wind energy company in the country."