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GE, Russian Companies Form Joint Venture

Posted on September 26, 2011

During the September Sochi Economic Forum, General Electric and two Russian companies , Inter RAO UES and United Engine-Building Corp. of Russia (UEC) signed an agreement regarding the creation of a new joint-venture company for gas turbine manufacturing in Yaroslavl Oblast, Russia. In this joint venture, GE will hold a 50% stake, with Inter RAO UES and UEC controlling 25% each. About US$154 million will be invested in a new turbine manufacturing facility with expected annual revenues of a few billion dollars.

The new plant will be located in the Yaroslavl region – about 500 km northeast of Moscow – and will produce about 14 GE 6FA-type gas turbines per year, each of which has a rated power of 77 MW. If necessary, the quantity of produced turbines could be increased to 20 per year. Construction is scheduled to begin this year, with the plant expected to be fully operational in 2013. “We plan to sell over 30 turbines of this type till the end of 2019 in Russia and CIS countries as well as in Latin America, mainly for co-generation,” said Mr. Boris Kovalchuk, director general of Inter RAO UES.

According to the strategy of the Russian Ministry of Trade for machine building, Russia will need gas turbines for power generation with total power around 24 GW through 2015 and another 12 GW up to 2020. This strategy also assists the development of Russian gas turbine manufacturing via the creation of joint ventures with leading foreign companies with significant manufacturing localization in Russia.

“Our 6FA gas turbines are intended for power generation mainly in co-generation mode and are very attractive for industrial and municipal consumers that need electricity and heat power simultaneously,” said Sergey Pakhomov, chief executive officer of GE Russia. “A great majority of existing Russian power plants used for this target were built during the 1950s – 1980s and use convectional out-of-date and simply old steam turbines. All these power plants need to complete modernization and GE 6FA turbines are ideal for this purpose. We expect a big demand for 6FA turbines in Russia in the near future.”

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