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United States

Wind market role shaping up -- GE Energy Financial

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GE Energy Financial Services made two major deals in the wind industry last month, investing $270 million in six projects in the US totalling 410 MW and agreeing an assets for equity swap with French wind project developer Théolia, in which GE relinquishes its German wind facilities to Théolia in return for an ownership stake of up to 22% in the French company.

In the US, the six projects GE targeted for investment -- located in California, Illinois, New Mexico and Pennsylvania -- are currently owned by affiliates of global investment and advisory firm Babcock & Brown. Babcock & Brown will retain holdings in the portfolio as Class B shareholders and also manage the projects. The investment will buy GE about 70% of the Class A shares of the six wind farms. A subsidiary of US bank Wachovia Corp will hold the balance of the Class A shares of the facilities. No further financial details have been disclosed.

All of the wind farms have either been completed or will be completed by the end of April, except the 70 MW Allegheny Ridge II project in Pennsylvania, which is expected to be finished by December. The projects use either Gamesa or Mitsubishi turbines. "This transaction continues the expansion of the geographic footprint and technology mix of our wind holdings," says GE's Kevin Walsh.

With this deal, GE has equity investments in 25 wind farms with a combined capacity of more than 1300 MW. Its total renewable energy investment portfolio sits at more than $1.75 billion, more than halfway to its target of $3 billion by 2008.

The US announcement came the day after GE announced its deal with Théolia, in which it gains 5.2 million shares of the Paris-based company in exchange for German wind parks located at Alsleben, Krusemark, Grossvargula and Zabelsdorf and totalling 165 MW of capacity. GE will invest a further EUR 20 million in Théolia in return for 1.2 million new shares and, as part of the agreement, will also be granted warrants to acquire 3 million more. The addition of the German wind farms brings Théolia's total wind power capacity to 243 MW.

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