GE, Itochu tie up on wind power projects

GE, the largest U.S. conglomerate and a top maker of wind power generators, and Itochu will jointly take a majority stake in a 30 billion yen US $326 million wind power project in Oklahoma, Itochu said.

The two firms also plan to cooperate in another large wind energy project being planned in the United States, Itochu said.

"We'll share information to explore business as investment opportunities for large-scale renewable energy projects are expanding on the global market," Minoru Kihara, general manager at Itochu's plant and project development, told reporters.

GE aims to expand its portfolio of renewable energy projects to $6 billion by the end of this year from the current $4 billion, he said.

The agreement also covers geothermal and biomass power generation and is scheduled to initially last five years.

The U.S. wind industry has grown nearly 40 percent on average in each of the past five years on new state demands for renewable energy sources, strong support from the federal government and the looming threat of carbon restrictions.

It has been a fast-growing business for GE, but Chief Executive Jeff Immelt has said he expects it to slow.

Shares in Itochu, which is Japan's fourth-largest trading house but has lagged rivals in the power generation business, rose 4.7 percent to 753 yen in morning trade, outperforming a 2.1 percent rise in the Nikkei average.

The contribution to its earnings could be small, however.

"Profit generated from such projects is usually small," said Jiro Iokibe, a senior analyst at Daiwa Securities Capital Markets.

"But the agreement could plant the seeds for future business and will brighten Itochu's mid-term business outlook."

The U.S. group is currently involved in patent disputes over wind turbine technology with Japan's Mitsubishi Heavy Industry Co, which is also keen to tap U.S. demand.

Itochu has a large global business network and is strong in the Chinese market.