Industrialist Gautam Adani-led Adani Group has signed a pact with South Korea's POSCO to explore business opportunities in sectors like steel, renewable energy among others.

Both the entities have signed a memorandum of understanding (MoU) to this effect.

In a statement on Thursday, Adani Group said the investment under the MoU is estimated to be up to USD 5 billion.

Adani Group said it "has agreed to explore business cooperation opportunities, including the establishment of a green, environment-friendly integrated steel mill at Mundra, Gujarat, as well as other businesses. The investment is estimated to be up to USD 5 billion."

The non-binding MoU intends to further collaborate at the group business level in various industries such as renewable energy, hydrogen, and logistics in response to carbon reduction requirements, the statement said.

Both parties are examining various options to cooperate and leverage the technical, financial, and operational strengths of each company.

POSCO and Adani intend to utilize renewable energy resources and green hydrogen, in line with both partners' Environmental, Social, and Governance (ESG) commitments to sustainability and energy efficiency.

Jeong-woo Choi, the CEO of POSCO, said, POSCO and Adani are able to come to great synergy in the steel and environment-friendly business with POSCO's state-of-the-art technology in steel making and Adani's expertise in energy and infrastructure.

"I hope this cooperation will be a good and sustainable business cooperation model between India and South Korea," Choi said.

Gautam Adani, Chairman of the Adani Group, said: "This partnership will contribute to the growth of India's manufacturing industry and the Aatmanirbhar Bharat scheme championed by the government of India. It will also help to strengthen India's standing in green businesses."

South Korean steel giant POSCO already has a presence in India. It runs POSCO-Maharashtra, a 1.8-million-ton cold-rolled and galvanized mill and four processing centres in Pune, Delhi, Chennai and Ahmedabad.

It is anticipated that this business cooperation between POSCO and Adani will bring dominant partnership synergy in the Indian steel industry.

POSCO and Adani have also signed a MoU with the government of Gujarat for support and cooperation from the government.