India, the world’s third-largest coal-producing country, is poised to sign a $1 billion deal to buy the majority of the new power plants from the Chinese government.
The deal, to be announced Thursday by Indian prime minister Narendra Modi, will help India replace old coal-powered power plants with cleaner, renewable power.
The deal will bring India’s coal production to a peak of around 100 million metric tons in 2022.
The Indian government has previously announced plans to replace more than 2,000 coal-burning power plants, but the number of such projects has been falling as demand has picked up.
India’s economy grew by 7.7 percent in the first quarter of this year, according to official data, the highest pace in the world.
The Chinese government is already the world leader in coal-fueled power generation.
Its coal-power plants generate around half of all the electricity in the country.
The new coal power plant will be built by a Chinese firm called Lianhe Group and will be owned by China National Nuclear Corp., which is part of China’s state-owned energy giant, CGN.
The project will also benefit from the recent decision by India to cut its coal imports to just 500 million metric tonnes from 1.2 million metric ton in 2022, with China to ramp up its imports.
Lianhe will operate two coal-generated plants in Assam and Assam state.
It will also build three additional coal-generating plants in Maharashtra, Rajasthan and Karnataka.
The projects are expected to generate around 2,300 megawatts of power each.
India’s coal demand has dropped by nearly 60 percent in recent years, largely due to a drop in coal prices.
India currently imports almost 50 percent of its coal needs from the Middle East, the region that includes the Middle Eastern countries of Saudi Arabia, Qatar, Kuwait and Oman.
India has also signed a $20 billion loan deal with the United Arab Emirates, which has become a major source of coal for the country and other parts of the world, to boost its coal production.