Sarkozy Pushes for Areva Reactor Accord to Help Meet India's Power Needs

French President Nicolas Sarkozy and Indian Prime Minister Manmohan Singh may sign a draft accord today for Areva SA to build two nuclear reactors to help meet energy demands in Asia’s second-fastest growing major economy.

Areva, the world’s biggest nuclear-power builder, is bidding to supply uranium fuel and build so-called Evolutionary Pressurized Reactors south of Mumbai. An “early works” agreement would precede the final contract by six months, a French official who cannot be named according to government rules, told reporters in New Delhi late yesterday.

Sarkozy, who is traveling with a group of 50 business leaders including Areva’s Anne Lauvergeon on a four-day tour, is also targeting defense contracts including the refurbishment of Indian jet fighters and missile sales. Singh and Sarkozy will meet at Hyderabad House in New Delhi and hold a press briefing.

Areva’s civil nuclear energy project at the Jaitapur site passed a key hurdle when India’s Environment Ministry gave its approval on Nov. 28. India plans to add 60,000 megawatts of nuclear power capacity in the next 14 years, a third of the current total output, to address power shortages.

Sarkozy two days ago said in Bangalore that by participating in the Jaitapur project, Areva “is becoming a key partner in India’s nuclear energy sector.” When the cooperation phase is completed, the six Franco-Indian reactors will supply 10,000 megawatts of capacity.

Preliminary Deal

Nuclear Power Corp. of India Ltd. and Areva signed a preliminary sales agreement in February 2009 that allowed the construction of up to six EPRs.

France was India’s fifth-biggest trading partner in 2009. Trade between the two countries in the first nine months of this year was 5.3 billion euros ($7.1 billion), down from 7.1 billion euros in 2008, according to the French government.

While no major defense deals are likely to be signed during Sarkozy’s stay, some contracts may be signed in the days following his departure, the French official said.

Companies including Thales SA, MBDA and Dassault Aviation SA are working to complete a deal to upgrade 51 Mirage-2000 jet fighters built by Dassault for India’s Air Force 30 years ago. The deal may include new avionics, missiles and radars and be worth up to $2 billion, La Tribune newspaper said on Sept. 28.

Aircraft Motors

Snecma, a unit of France’s Safran SA, is working to conclude a deal with India’s Defense Research and Development Organization to jointly build motors for military airplanes. MBDA is also working with DRDO to build short-range anti- aircraft missiles.

Sarkozy’s visit was also designed to push forward his Group of 20 chairmanship agenda to overhaul the global monetary system and regulate commodities markets. On his first stop in Bangalore he called on India to play a greater role in the G-20 and pledged to support its bid for a permanent seat at the United Nations Security Council.

Singh pledged to support Sarkozy’s agenda, the French official, said citing conversations between the two leaders at a dinner yesterday.

Sarkozy will meet with India’s President Pratibha Patil later today before giving a speech to the French community. Tomorrow he and his wife, Carla Bruni-Sarkozy, will head to Mumbai where the French president will attend a business conference.