The joint venture, known as Atmea, was unveiled in Paris, where it will be based. The venture will develop a 1,100-megawatt reactor with initial capital of 66 million, or $90 million. The plan to form a venture was first announced in July.
The pressurized-water reactor, called Atmea 1, will be designed to meet the needs of "countries or regions which can't support large reactors in their power networks, including some Asian countries or Eastern European countries," said Kazuo Tsukuda, president of Mitsubishi Heavy Industries.
The cooperation will help the two companies "fully take advantage of the growth, which is being confirmed, in nuclear power," Anne Lauvergeon, chief executive of Areva, said. Some North African countries could also be interested in such a reactor, Lauvergeon added.
President Nicolas Sarkozy of France and the Libyan leader, Colonel Muammar el-Qaddafi, signed an agreement in July to build a nuclear reactor to power a desalination plant in Libya. The two countries also agreed to cooperate exploring for uranium in Libya.
Stefan vom Scheidt, an executive at Areva, was chosen to be the chief executive of Atmea, while Makoto Kanda, an executive with Mitsubishi Heavy Industries who has worked in the marketing of nuclear projects in the United States and Asia, was named to be his deputy.
Asked whether Mitsubishi Heavy would consider buying a stake in state-owned Areva should the company's ownership structure evolve, Tsukuda, the Mitsubishi president, said he did not "have a fixed view."
"What's important is the state of our cooperation with Areva," he said. If Areva's ownership structure changed, "we could react," he said.
Lauvergeon said that an enlargement of the company's capital would be "the best solution" to finance expansion amid a worldwide nuclear revival. She said that the timetable was up to the French government.
Areva's main shareholder, the French state-owned nuclear agency, sent a memo to the government in July describing possible scenarios by which it might dispose of all or part of its 79 percent stake to finance the dismantling of the country's old plants after 2009, Xavier Clément, a spokesman for the agency, said recently.
Some companies, including Mitsubishi Heavy, were cited in the memo as potential investors in Areva.
A change in the ownership structure of Areva will not happen in the near future, Claude Guéant, chief of staff to Sarkozy, said on the French radio station RTL.