Inter RAO to retain servicing under GE JV, turbine production no longer planned
MOSCOW. Aug 30 (Interfax) - Inter RAO no longer plans to manufacture turbines through its joint venture with General Electric, but servicing will continue, the Russian power company's CEO, Boris Kovalchuk told reporters.
The joint venture, Russian Gas Turbines (RGT), "includes both a plant and a service center," so "servicing work is being done, competencies are being built up there," he said when asked about operations at the venture with GE.
"In terms of licenses, as you said, GE decided not to develop production of gas turbines, so we're talking about servicing," Kovalchuk said, confirming that "in today's circumstances, of course there are not [any plans to produce localized turbines at RGT]."
"As for the future of the joint venture with General Electric, the partners need to discuss how they see this for themselves," he said, speaking about RGT's equity capital. "We'll probably sit down [with the partners] next year and arrive at something," Kovalchuk said.
RGT said in its report for 2022 that its strategy was being reviewed and no longer called for localizing production of the GT13E2 large capacity gas turbine.
"Significant changes in the format and degree of General Electric's participation in the implementation of joint projects to localize production of gas turbines that have unfavourable consequences for RGT have taken place as a result of external economic events in 2022. Taking into account the changes, a localization plan was approved that does not include measures to localize the GT13E2 gas turbine," the company said in the report, which was published in May.
The company took a write-off of 4.1 billion rubles on the project to localize the GT13E2 turbine.
The company also said that on another joint project, the 6F.03RGT turbine, it planned to achieve 90% localization in 2027 at the earliest.
RGT, founded in 2021, has a plant in Rybinsk where it assembles 6FA gas turbines (capacity up to 88 MW) using GE technology. Production was launched in 2014.
Until 2019, Inter RAO owned 25% of RGT, United Engine Corporation (UEC) owned 25 and GE held 50%. Inter RAO bought out UEC's stake in the spring of 2019 and in September 2020 it acquired control of 50.99% of RGT.
Also in September 2020, Inter RAO and GE signed a package of agreements to increase the level of localization in Russia for production and servicing of large-capacity turbines. They planned to increase localization to 100% for the 6F.03 turbine and set up local production of the 210-MW GT13E2 turbine.
But in March 2022 GE announced the suspension of its business in Russia, with the exception certain operations such as supporting existing power services. In its report for the first quarter of 2023, GE said its remaining assets in Russia and Ukraine were worth an estimated $300 million, are mostly in the energy business and are not subject to sanctions or the company's internal restricts.
RGT closed 2022 with a loss of 4.8 billion rubles compared to 0.28 billion rubles a year earlier. Revenue grew by 13.7% to 406.4 billion rubles.