Under the new arrangement, the Brazil-based JV will transform into a consolidated hydro power business in which GE is the majority owner, it said in a statement. Further information was not immediately available.
The hydro business will be headquartered in Brazil, and will benefit from the marketing muscle of the GE Power division.
In a statement, GE said that the restructuring move was a response to increasing cost competition in the hydro sector plus the corporation’s internal need to consolidate to secure advantage regionally – especially in Europe – and by product. ge-hydro‘s operations in Finland and Sweden are to be added to the consolidated business. It also intended to remain a major player in Latin America, especially Brazil.
GE added: ‘There will be a number of realignments through our Hydro business to meet this objective and investment in the Joint Venture to ensure it has the resources it will need to be successful’.
The JV between GE and Inepar was established in 1998.
In December 2006, GE announced it was selling its hydro business to the Pescarmona Group of Companies – the parent of Argentina-basd IMPSA. The divestment was to include its worldwide hydro business except for operations in Norway and Sweden, and the deal was to close in the first quarter of 2007.
However, the deal did not close, and would not do so, it was confirmed mid-year. Reasons for the failure to consummate the agreement have still not been given, but IWP&DC understands from GE sources that as it had awaited the buyer to complete the due processing steps of the purchase by the deadline, and which then expired, its senior executives became more aware of the growing prospects for hydro power in the energy sector.
As a result, over recent months the hydro executives have been charged with producing a business plan for the group. IWP&DC was informed by the sources that there had not been a requirement for a detailed business plan following the announcement of the divestment of most of the hydro business, which is a tiny part of the GE conglomerate.
Separately, GE said that it was investing in production capability in Vietnam to manufacture diverse components for various part of its power generation portfolio, but gave no further details on the sectors to be supplied.
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