Siemens said June 24 it had agreed to produce advanced gas power turbines in Russia with the domestic power plant firm Power Machines. Power Machines is to obtain the technology from Siemens under a licensing agreement and the German group also agreed with Russian billionaire owner Alexey Mordashov on terms for further development and modernization of the Russian firm.
"Since Alexey Mordashov, the new principal shareholder, came on board, the dynamics of cooperation with Power Machines have significantly increased," a statement quoted Siemens chief executive Peter Loescher as saying. Mordashov also owns the Russian steel group Severstal.
Siemens had initially planned to take over Power Machines on its own by exercising an option on 30.4% of shares in the company. But Russian authorities blocked the deal, and Mordachov ended up owning the stake. Together, he and Siemens now control 55% of Power Machines.
"With our partner Power Machines, we have already secured orders in Russia for a large number of power plant projects," Loescher said. "With an installed capacity of 218 gigawatts Russia is the world's fourth largest power market."
The country faces a major challenge in replacing ageing power stations, but the deal was also expected to result in sales to Belarus, other former Soviet republics, Baltic states and India, the statement said. Production of components for the first SGT5-4000F gas turbine was to begin next year.
Copyright Agence France-Presse, 2008