GE unit forms venture with Canadian company

GREENWICH, CONNECTICUT - Stamford-based GE Energy Financial Services has demonstrated its belief in hydroelectric power production, joining with a Canadian-based power developer to bid on two projects that are expected to exceed $3.2 billion - the largest single private sector hydroelectric-generation investment in Canada.

The unit of Fairfield-based General Electric Co. and Plutonic Power Corp., of Vancouver, submitted the bids in response to BC Hydro's 2008 Clean Power Call, which seeks to make British Columbia electricity self-sufficient by 2016.

The projects entail installation of pipes and electric turbines to harness energy from run-of-river water, unstored water from glacial melt in nearby mountains.

The venture would create 1,200 megawatts of energy - enough for 330,000 homes - in British Columbia's Toba and Bute Inlets, where the companies are building the East Toba River and Montrose Creek 196-megawatt hydroelectric project for about $528 million.

The projects demonstrate GE and Plutonic's support of clean, renewable energy projects worldwide, said Mark Tonner, managing director of Canada at GE Energy Financial Services in Calgary.

"Run of river is one of the cleanest forms of power energy," he said. "This fits in very well with where our business is going, which is providing capital to renewable energy resources."

BC Hydro issued requests for proposal in June for 5,000 gigawatts per year of energy to make British Columbia self-sufficient in terms of energy by using 90 percent domestic clean-energy resources.

The GE unit has given an equity contribution of about $79.3 million and extended about another $71.3 million in credit for the East Toba River and Montrose Creek project, said Donald McInnes, Plutonic's vice chairman and chief executive officer.

Plutonic borrowed another $372.8 million from a syndicate of financial institutions arranged by Manufacturers Life Insurance Co. and GE Capital Markets in Canada, he said.

If the necessary approvals are obtained, GE Energy Financial would provide an equity contribution of about $55.6 million for the Upper Toba project and another $515.8 million for the Bute Inlet project, McInnes said.

"GE has been a very good partner for us in the first project, and this was a natural extension into these projects," he said. "We are very appreciative of the support they've given us."

Plutonic's financial figures concerning GE's equity contributions are preliminary and subject to change based on parameters outlined by GE, said Andy Katell, spokesman for GE Energy Financial Services.

The GE unit also submitted a separate bid to finance a $636 million project with Finavera Renewables for four wind-power projects in Vancouver. The endeavor, also part of the BC Hydro 2008 Clean Power Call, would result in the creation of 295 megawatts of power.