French engineering group Alstom and China-based Shanghai Electric Group have signed a letter of intent (LOI) for the creation of a 50/50 joint venture (JV) combining both partners' power plant boiler businesses.

The joint company, which will be called Alstom-Shanghai Electric Boilers Co, will supply new boilers and spare parts for coal-fired power plants.

The new company will be registered in Shanghai, with operational headquarters in Singapore.

Alstom chairman and CEO Patrick Kron said that for Alstom, the joint company will be an essential asset to develop the company’s positions in China.

Alstom and Shanghai Electric expect to set-up the joint company after finalization of their agreements and completion of social and regulatory processes.