The US-based technology services conglomerate GE and Abu Dhabi's investment arm Mubadala will now go ahead with the proposed joint venture as GE has finalised plans to raise the $4 billion (Dh14.68bn) equity in the venture.
"The joint venture will be implemented on schedule," Nabil A Habayeb, GE's President and Chief Executive for Middle East and Africa, told Emirates Business.
GE sees no problem in raising the $4bn it needs as its equity investment in the $8bn joint venture.
"Liquidity crunch won't stop GE. Our committed project plan is in place. We are on track and have finalised all legal paperwork. GE and Mubadala will go ahead with the project. There is no question of revisiting our financial commitment to the project. The structure we announced earlier is not impacted by either the liquidity problem or anything else," Habayeb said in an interview.
Habayeb did not disclose how GE plans to finance its equity participation at a time when credit markets are frozen, but said: "GE works on long-term strategies and short-term business dynamics would not impact ongoing projects."
The US-based technology services conglomerate and Mubadala are in the process of setting up the $8bn joint venture with equal equity holding. As part of the business plan, each partner will invest $4bn over next three years. The plan is also to leverage this equity into a larger investible fund.
The venture will focus on growth opportunities in the Middle East and Africa and enable Mubadala to leverage GE's commercial finance capabilities.
"The joint venture with Mubadala has three elements – a JV between GE and Mubadala; participation in Masdar Green City; and Mubadala becoming one of the top 10 shareholders of GE. All these three elements will be fulfilled as per the JV agreement.
The first part is already in place. We are setting up a centre in Masdar City focusing on sustainable business solutions. Everything is going on as per the strategy and there is no change in the plan and no impact of any other factor," Habayeb said.
Masdar City is Mubadala's alternative energy initiative and in which GE with its 4,000-sqm centre, is an anchor tenant. The centre will support the development of energy-efficient products and spread the awareness about energy conservation in the Middle East and Africa.