GE Energy Financial to invest US$5 billion outside U.S. by 2010

GE Energy Financial Services, a unit of General Electric Co. said March 11 it plans to invest US$5 billion outside the United States by 2010, with an emphasis on renewable energy, captive power, and water projects.

The US$5 billion allocation assigns about 25 percent of the unit’s total investment overseas, up from 10 percent traditionally, GE Energy Financial Services said. It is focusing on emerging markets in India, Southeast Asia, Latin America, and Turkey-Middle East, it said.

The strategy reflects GE’s push to boost its international revenues by taking advantage of a global infrastructure boom, especially in energy, the company said. It has expanded its office in India and opened new offices in Dubai and Singapore.

The unit said it has about US$17 billion in assets and would focus its investments on renewable energy and water projects, as well as captive power plants, which are set up by large energy users like industrial companies for their own use.

The company noted in 2007 it established two “platforms” of non-U.S. growth.

Turkey’s GAMA Enerjii S.A.

One platform was the acquisition in December of a 50 percent stake in GAMA Enerjii S.A. of Turkey, a power plant development unit of Turkish constructor GAMA Holding AS. (HNN 12/11/07)

GAMA Enerjii owns shares in Turkey’s 672-MW Birecik Dam, the first large privately financed hydro project built in Turkey and the first based on a build-own-transfer scheme. GAMA Enerjii is working on 13 hydroelectric projects in Turkey totaling 365 MW, as well as nine wind projects totaling 490 MW. It has applied for licenses to build 600 MW of coal-fired and 400 MW of gas-fired plants.

India’s KSK Power Ventur Plc

The other platform was the acquisition of 26 percent of the equity of Sayi Power Energy Ltd., majority owner of KSK Power Ventur Plc of India. With a listing on the London Stock Exchange, KSK has eight projects of 875 MW in operation or under construction, and a project pipeline of 3,200 MW expected to be on line by 2012.

KSK Power Ventur plc last year won contracts to build two hydroelectric projects totaling 725 MW in India’s Arunachal Pradesh State. (HNN 4/17/07) In a joint venture with Lehman Brothers of the United States, KSK entered agreements with Arunachal Pradesh to build 600-MW Kameng Dam and 125-MW Dibbin, both on the Kameng River.

KSK said it has entered memoranda of agreement with Arunachal Pradesh for feasibility studies and implementation of another six projects in the Bichom and Digien basins: 90-MW Dinchang, 10-MW Dinen, 20-MW Dimijin, 100-MW Utung, 60-MW Najang, and 15-MW Dikhri. It previously upgraded the 15 MW Avantika hydro project to 18 MW.

Canada’s 196-MW East Toba-Montrose

In November, GE Energy Financial and Plutonic Power Corp. announced closing of a senior secured credit facility for construction of the 196-MW East Toba River Montrose Creek hydroelectric project in British Columbia. (HNN 11/12/07)

In January, GE Energy Financial said it increased its renewable energy investment target — both in the U.S. and outside — to US$6 billion by 2010. It said it had topped its previous target of US$3 billion, with a single US$300 million investment in wind projects in four U.S. states.

“With out broad capabilities to invest equity and debt within and outside the United States — not only in wind, but in solar, biomass, hydro, and geothermal power — we have become a major player in a US$60 billion annual renewable energy market,” President Alex Urquhart said.

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