The World Bank estimates that the developing world will grow more than twice as fast as high-income countries over the next two years. However, these nascent economic booms will require heavy investments in infrastructure, $1.2 trillion per year according to projections made by The Brookings Institution.
GE’s broad industrial portfolio spanning turbines, locomotives, water treatment units, jet engines and other key solutions has the tools needed to solve many of the most pressing infrastructure needs.
Take a look at Mongolia, a new GE market. The landlocked Asian nation of 3.1 million, sandwiched between China and Russia, grew at a furious 20.8 percent rate during the third quarter of 2011. Mongolia is rich in coal and copper and the mining industry is driving the growth. But the expansion is also taxing Mongolia’s energy resources. Demand for power is expected to double by 2015.
Enter GE. The company will supply Mongolia with turbines for its first wind farm, a renewable energy source that will generate 5 percent of the country’s electricity output. The $100 million project will be located on a windswept steppe in Salkhit, some 43 miles southeast of the capital Ulan Bator. GE will supply and service the wind turbines in a deal valued at about $50 million.
The farm will feature GE’s massive 1.6-megawatt wind turbines, standing 260-feet tall and with rotors spanning 270 feet. It will be financed by the Mongolian investment company Newcom. Mongolia plans to generate a quarter of its electricity from renewable resources by the end of the decade.
John Rice, Vice Chairman and CEO of GE’s Global Growth and Operations, was on hand in Mongolia when the project was announced yesterday. “The work we’ve done here is really significant in terms of our strategic footprint,” Rice said. “I can point to a dozen other countries where we do between $500 million and $1 billion a year, where maybe six or seven years ago we did our first $100 million. That’s the way we work in this world, being present, being established, and having success breeds further success. Whether you are talking about Nigeria or Algeria, that’s the way it works,” said Rice.
The Salkhit wind project is scheduled to start supplying the Mongolian grid with clean power in 2012. It will cut CO2 emissions by 185,000 tons and preserve 383 million gallons of water annually by switching electricity generation from fossil fuels to wind.
GE is already helping Mongolia modernize its locomotives. GE and Newcom are also exploring other opportunities in energy, water, aviation, healthcare and other areas. “In the near term, our volume here could exceed $100 million, and we think that’s just a start,” Rice said.