GE Buys 1st Power Transmission Lines Abroad
Posted on: Tuesday, 29 November 2005, 12:00 CST
By JOHN CHRISTOFFERSEN
STAMFORD, Conn. - General Electric Co. is making its first investment in power transmission lines abroad, part of a strategy to step up business in developing countries and diversify energy holdings.
The Fairfield-based industrial and financial services giant announced Tuesday it will spend $24.4 million in a partnership to buy three transmission lines in Chile.
"I think this is going to be the first of many," said Stephen Petricone, a managing director of GE Energy Financial Services. "It depends upon finding the right country. GE as a company has made a commitment to grow in emerging economies."
GE said it was attracted to Chile because of its high sovereign debt rating. The country's electric utility industry was privatized more than a decade ago.
Transmission lines offer limited risk and competition and a steady stream of income to companies such as GE, which expects 60 percent of its growth in the next decade to come from developing countries.
Under the agreement, GE will acquire an 80 percent stake in a partnership with Abengoa, a Spanish engineering company which built and operates the transmission lines. The lines span 183 miles and transmit power to a copper mine and from two hydroelectric plants to a central grid.
Supplying power to hydroelectric plants is the latest move by GE to diversify its energy holdings by increasing its investments in alternative energy sources such as wind power. Copper is a major industry in Chile.
Shares of GE rose 8 cents, or 0.2 percent, to $36.06 in trading on the New York Stock Exchange.
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On the Net:
http://www.ge.com
Source: Associated Press/AP Online
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