General Electric Co. (NYSE:GE),the world’s leading producer of power-generation equipment, whichalready has significant interests in Brazil, plans to invest anadditional $118 million in the South American nation this year.
GE’s plans include an building a Research and Development centerthat will serve all of Latin America, $50 million on a medical anddiagnostic equipment factory in the state of Minas Gerais, a $35million on an airplane engine maintenance plant in the capital Rio deJaneiro, a $12 million locomotive factory, and a $21 million deep-seaoil equipment plant.
The American energy giant recently signed a deal with SaoPaolo-based Cosan Combustiveis e Lubrificantes, a division of sugarcane ethanol producer Cosan Ltd. (NYSE:CZZ),to supply the company with 50 freight locomotives, which will be builtby its affiliate GE Transportation South America, at a plant inContagem, Brazil. Also, GE has announced plans to participate in wind,solar and nuclear energy auctions sponsored by the Brazilian government.
Last month, General Electric reached a milestone in Brazil: working with the federal energy company, Petrobras Energia SA (NYSE: PZE),at the Juiz de Fora Power Plant, it achieved the world’s first use ofsugarcane-based ethanol in a natural gas turbine system to produceelectricity on a full commercial scale.
Brazil, which is the world’s largest exporter and second-largestproducer of ethanol (after the U.S.), will benefit greatly fromincorporating the alternative fuel into its thermal generationcapabilities. Brazil’s climate and soil is ideal for growing sugarcane(about half of the country’s total crop is used for ethanolproduction). Ethanol derived from sugarcane is one of the mostefficient biofuels in terms of carbon emissions and energy balance.
Additionally, this spring, GE will begin supplying Brazilian power producer Breitener Energética SAwith natural gas engines to replace older power generators thatcurrently run off of oil. Breitener will install 46 of GE’slow-emission Jenbacher gas engine generator sets, which will generate atotal of 120 megawatts of cleaner, more reliable power for thefast-growing city of Manaus, the second-largest metropolis in northernBrazil’s Amazon region. The financial terms of the agreement were notdisclosed.
The former Portuguese colony has a goal of reducing greenhouse gas emissions by between 36.1 and 38.9 percent by 2020.
Brazil accounted for roughly 40 percent, or $3 billion, of GE’s Latin American revenue in 2009.