GE, INTER RAO UES & Russian Technologies to Form Joint Ventures

  GE, INTER RAO UES & Russian Technologies to Form Joint Ventures to Modernize
  Russia’s Power Generation & Healthcare Sectors

Business Wire

MOSCOW -- December 27, 2010

GE (NYSE: GE) and two Russian companies signed a framework agreement today to
form joint ventures that will help modernize the country’s healthcare and
power generation sectors by localizing technology, manufacturing and
expertise.

Under the framework agreement, GE, state corporation Russian Technologies
(Rostekhnologii) and INTER RAO UES JSC intend to form a joint venture to
manufacture, assemble, sell and service energy-efficient heavy-duty gas-fired
power generation turbines in Russia. GE and Russian Technologies also intend
to form a joint venture to manufacture, assemble, sell and service high-tech
medical diagnostic equipment in Russia. Financial details of the transactions
were not disclosed.

The framework agreement -- signed today in Moscow by GE International
President and CEO Ferdinando Beccalli-Falco, Inter RAO UES Management Board
Chairman Boris Kovalchuk and Russian Technologies’ Deputy General Director
Dmitry Shugayev and witnessed by Russian Prime Minister Vladimir Putin --
supports the Russian government’s priorities of attracting foreign investment,
enhancing the country’s aging energy infrastructure and modernizing its
healthcare system. These initiatives are aligned with GE’s and its partners’
core industrial capabilities. Until local production of components can be
established in Russia, they will be imported from other GE locations or
qualified suppliers.

“These strategic partnerships are the latest examples of GE’s long-term
commitment to Russia and our ‘company to country’ strategy, in which we work
directly with governments to satisfy their needs in rapidly developing
markets,” said Beccalli-Falco. “We are working with our Russian partners to
bring technology to Russia and develop it locally. By harnessing GE’s wide
range of products and services in strategic growth sectors, we and our
partners can help to diversify Russia’s economy beyond natural resources and
increase energy efficiency. In addition, we can apply innovative technology to
help Russia reduce costs, increase access and improve quality in healthcare.”

Building on a memorandum of understanding the parties signed June 4, 2010,
today’s agreement reflects GE’s deepening commitment to Russia, a major growth
market for the company. The framework agreement envisions production of GE’s
energy and medical equipment in Russia, as well as technology transfer, which
will facilitate the development of a local supply chain and later, production
in Russia of component parts for the joint ventures.

Energy Joint Venture

In energy, GE agreed with Russian Technologies and INTER RAO UES to form a
jointly owned entity to manufacture, sell and service GE’s highly efficient,
low-emissions and heavy-duty 6FA gas turbines at a factory to be built in the
vicinity of the Russian city of Rybinsk. The turbines will address a growing
need in Russia for high-performance, mid-sized power blocks in combined heat
and power applications.

“INTER RAO sees this agreement as way to introduce modern, highly effective
solutions for steam/gas cogeneration to the Russian energy sector, optimizing
spending on the construction of new gas generation facilities and modernizing
existing installations,” said Kovalchuk. “This will increase the stability and
reliability of the energy system.”

This is the latest and most significant step in GE’s multi-phase localization
plan for its Energy business in Russia. In November, GE opened the Kaluga
Energy Technology Center to service advanced power generation equipment,
helping customers keep their power plants running more reliably and
efficiently. Initially, the new center will offer services for GE power
generation equipment installed in Russia and the CIS. Later, the center’s
production capabilities will be expanded to meet the Russian energy market’s
demand for various products.

According to Russia’s Energy Ministry, the country needs to invest US $80
billion in the next 10 years to address aging generation assets. Official
Russian government forecasts say Russia needs to build 80 gigawatts of thermal
power generation capacity in the next 20 years. According to the Ministry, the
average efficiency of gas-fired power stations in Russia is 38 percent, with a
goal of 53 percent efficiency by 2030.

Healthcare Joint Venture

The healthcare joint venture is expected to start with production of CT
scanners, then expand to other diagnostic equipment such as angiographs, MRI,
ultrasound, digital X-ray, PET, gamma cameras and medical devices. The joint
venture may use the recently established joint GE Healthcare-Medical
Technologies Ltd. CT scanner assembly facility in Moscow. In May 2010, GE
Healthcare installed in a Moscow hospital the first Russian-assembled 16-slice
CT scanner, and through the end of November, it had been used to perform more
than 2,000 exams.

Healthcare components initially will be sourced from GE, shifting later to
local production by qualified Russian suppliers in keeping with GE’s
requirements for quality, cost-effectiveness, design specifications and
intellectual property protection.

The government plans to spend more than US $15 billion from 2011-2013 on
healthcare. GE estimates Russian demand today for CT scanners alone at 3,000
units.

“The energy joint venture will provide Russian Technologies with the
opportunity not only to produce high-tech gas turbines but to acquire a
potential customer for components, services, repair and rehabilitation,” said
Shugayev. “This will align with GE’s commitment to the maximum localization of
production of energy equipment. On our side, we have already begun modernizing
our businesses to make them qualified suppliers. The medical joint venture,
meanwhile, could make a substantial contribution toward modernizing Russia’s
healthcare system. Establishing production in Russia will facilitate not only
the transfer of modern technology and local sourcing of components, but timely
and quality service, as well as the creation of a wide regional system for the
preparation of specialists.”

Russian Technologies and INTER RAO UES JSC will each hold a 25 percent stake
in the energy joint venture. Russian Technologies will also hold a 50 percent
stake in the healthcare joint venture. GE will hold 50 percent of each joint
venture. GE will exercise operational control over the joint ventures, with
joint decisions by the partners on strategic matters.

About GE in Russia

GE, which has been operating in Russia since the early 20^th century starting
with the Soviet Union’s electrification and sale of locomotives and oil and
gas equipment, is today represented across the country in multiple industries:
healthcare, transportation, aviation, electric power, oil and gas, water
treatment, financial services, media, appliances, lighting and intelligent
platforms. With a head office in Moscow, GE has 2,500 employees and reported
2009 revenues of US $1.6 billion in Russia. GE has established training
centers for Energy and Healthcare in Moscow.  For more information, visit
www.ge.com/ru.

GE (NYSE: GE) is a diversified infrastructure, finance and media company
taking on the world’s toughest challenges. From aircraft engines and power
generation to financial services, health care solutions, and television
programming, GE operates in more than 100 countries and employs about 300,000
people worldwide. For more information, visit the company's Web site at
www.ge.com.

About INTER RAO UES JSC

INTER RAO UES, JSC is one of Russia’s largest electric power companies,
controlling a number of generation and distribution assets in Russia and
abroad. The total installed capacity of the electric power stations of INTER
RAO UES Group is about 18,000 MW. The company is a major investor and a
leading exporter and importer of electric power in Russia, as well as a major
generator in Russia.

About Russian Technologies State Corporation

Russian Technologies State Corporation was set up in accordance with the
Federal Law of the Russian Federation on Nov. 23, 2007. Russian Technologies
State Corporation’s goal is to assist in the development, production and
export of high-tech industrial products by providing support, both on the
domestic and foreign markets, to Russian companies involved in the development
and production of high-tech industrial products, and by attracting investments
to organizations in various industries. www.rostechnologii.ru

Caution Concerning Forward-Looking Statements:

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Contact:

GE US:
Andy Katell, +1-203-961-5773
andrew.katell@ge.com
or
GE Russia/CIS:
Sergey Zverev, +7 (495) 739-8849
Mob +7 (916) 983-8814
sergey.zverev@ge.com
or
GE Energy Russia/CIS:
Ekaterina Goron, +7 (495) 933-0189
Mob +7 (985) 364-6897
Ekaterina.goron@ge.com
or
Russian Technologies
Press Service:
Tel +7 (495) 287-2550, 2437
Fax +7 (495) 287-2500, 5060
media@rostechn.ru
or
INTER RAO UES:
Nikolai Gorelov, +7 (495) 967-0527
Gorelov_NV@interrao.ru
 
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