GE unit makes large investment commitment to wind

HOUSTON, Texas, US, February 21, 2007. A unit of General Electric will invest in a portfolio of 410 MW at six windfarms.

GE Energy Financial Services says the investment would be among its largest in the wind sector, with funding of US$270 million for 70% ownership of six windfarms in California, Illinois, New Mexico and Pennsylvania. Until now, the equity was held by affiliates of global investment and advisory firm Babcock & Brown, which will remain as Class B equity co-investors in the portfolio.

The 30% balance of the Class A equity will be provided by a subsidiary of Wachovia. This consists of 90 MW at Aragonne Mesa in New Mexico (using Mitsubishi turbines), 80 MW and 70 MW at Allegheny Ridge I and II in Pennsylvania (using Gamesa turbines), 80 MW at GSG in Illinois (using Gamesa turbines), 52 MW at Mendota Hills in Illinois (using Gamesa turbines) and 38 MW at Buena Vista in northern California’s Altamont Pass (using Mitsubishi turbines).

All the windfarms have either been completed or will be completed by the end of April, except Allegheny Ridge II which is expected to be finished by December.

“This transaction continues the expansion of the geographic footprint and technology mix of our wind holdings,” says Kevin Walsh at GE EFS. “The portfolio helps the states of Arizona, California, Illinois and Pennsylvania meet their renewable energy targets, and reinforces GE’s commitment to ecomagination” (GE’s initiative to provide cleaner energy products.)

Combined, the six windfarms will generate electricity for 100,000 homes and reduce GHG emissions by 0.7 Mt a year compared with fossil fuel generation.

“This mix of projects is an exciting addition to our rapidly expanding U.S. portfolio,” says Hunter Armistead of Babcock & Brown’s wind energy group. “We are excited to see the rapid growth of wind power in the U.S. and are committed to making sure this growth continues.”

With the transaction, GE EFS has invested or committed to invest equity in 25 windfarms, boosting the total capacity of its wind equity holdings to 1,300 MW around the world.

GE Energy Financial Services controls $13 billion in assets, and invests $5 billion a year in energy and water. In renewables, the Connecticut company is involved in wind, solar, biomass, hydro and geothermal power, and is growing its portfolio of $1.8 billion in renewable energy assets.

Recently, it expanded its wind energy work by entering an alliance with Theolia to “significantly increase” that company’s wind portfolio in Europe. In an assets-for-equity swap, Theolia will acquire 165 MW of GE EFS’s European windfarms and will “materially strengthen” its operating position in the German market.

GE EFS will also support Theolia by contributing Euro 20 million in return for new shares. Its German windfarms in Alsleben, Krusemark, Grossvargula and Zabelsdorf have total capacity of 165 MW and use 66 REpower 1.5 MW turbines and 44 of GE’s 1.5 MW turbines. The combined portfolio generates electricity for 70,000 homes and reduces GHG emissions by 350,000 tons a year compared to fossil fuel generation.

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