GE, Russian Companies Form Joint Ventures in Power Generation & Healthcare

Russia will need to invest $80 billion in the next 10 years in the energy sector and $15 billion from 2011-2013 on healthcare.

GE, state corporation Russian Technologies (Rostekhnologii) and INTER RAO UES JSC are forming a joint venture to manufacture, assemble, sell and service energy-efficient heavy-duty gas-fired power generation turbines in Russia.

GE and Russian Technologies also intend to form a joint venture to manufacture, assemble, sell and service high-tech medical diagnostic equipment in Russia. The agreement envisions production of GE's energy and medical equipment in Russia, as well as technology transfer.

"These strategic partnerships are the latest examples of GE's long-term commitment to Russia and our 'company to country' strategy, in which we work directly with governments to satisfy their needs in rapidly developing markets," said Beccalli-Falco. "We are working with our Russian partners to bring technology to Russia and develop it locally."

The framework agreement was signed on Dec. 27 in Moscow by GE International President and CEO Ferdinando Beccalli-Falco, Inter RAO UES Management Board Chairman Boris Kovalchuk and Russian Technologies' Deputy General Director Dmitry Shugayev and witnessed by Russian Prime Minister Vladimir Putin.

Energy Joint Venture

In energy, GE agreed with Russian Technologies and INTER RAO UES to form a jointly owned entity to manufacture, sell and service GEs low-emissions and heavy-duty 6FA gas turbines at a factory to be built in the vicinity of the Russian city of Rybinsk. The turbines will address a growing need in Russia for high-performance, mid-sized power blocks in combined heat and power applications.

"INTER RAO sees this agreement as way to introduce modern, highly effective solutions for steam/gas cogeneration to the Russian energy sector, optimizing spending on the construction of new gas generation facilities and modernizing existing installations," said Kovalchuk. "This will increase the stability and reliability of the energy system."

In November, GE opened the Kaluga Energy Technology Center to service advanced power generation equipment. Initially, the new center will offer services for GE power generation equipment installed in Russia and the CIS. Later, the center's production capabilities will be expanded to meet the Russian energy markets demand for various products.

According to Russia's Energy Ministry, the country needs to invest $80 billion in the next 10 years to address aging generation assets. Official Russian government forecasts say Russia needs to build 80 gigawatts of thermal power generation capacity in the next 20 years. According to the Ministry, the average efficiency of gas-fired power stations in Russia is 38%, with a goal of 53% efficiency by 2030.

Healthcare Joint Venture

The healthcare joint venture is expected to start with production of CT scanners, then expand to other diagnostic equipment such as angiographs, MRI, ultrasound, digital X-ray, PET, gamma cameras and medical devices. The joint venture may use the recently established joint GE Healthcare-Medical Technologies Ltd. CT scanner assembly facility in Moscow. In May 2010, GE Healthcare installed in a Moscow hospital the first Russian-assembled 16-slice CT scanner, and through the end of November, it had been used to perform more than 2,000 exams.

Healthcare components initially will be sourced from GE, shifting later to local production by qualified Russian suppliers in keeping with GE's requirements for quality, cost-effectiveness, design specifications and intellectual property protection.

The government plans to spend more than $15 billion from 2011-2013 on healthcare. GE estimates Russian demand today for CT scanners alone at 3,000 units.

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