Mubadala expects $5bn business in GE venture

Mubadala expects its commercial finance joint-venture with General Electric to do US$5 billion in business next year.

Waleed Al Muhairi says together GE and Mubadala will generate $5bn in business next year.

Mubadala Development, Abu Dhabi's strategic investment arm, expects its commercial finance joint-venture with General Electric to do US$5 billion (Dh18.36bn) in business next year, a senior executive said yesterday. The venture was a key part of a GE-Mubadala co-operation announced last year. The two companies were each to contribute $4bn in equity to the commercial finance business, and co-operate on a range of investment, education and research and development initiatives.

Those included establishing a clean energy and water research and development facility at Masdar, the carbon-neutral city near the Abu Dhabi International Airport, and a corporate education programme also to be based at Masdar. The joint venture, announced last July and formally launched this May, was a strategic priority for Abu Dhabi that would offer Mubadala large financial returns, said Waleed al Muhairi, the chief operating officer of Mubadala.

Mubadala and GE had already booked about $1bn worth of commercial financing business this year, Mr al Muhairi said. "We'll be a very large player in commercial finance probably by next year," he told a renewable energy conference in the capital. "If you're able to do a reset and start from scratch, we think the opportunities will provide excellent risk-adjusted returns." Mr al Muhairi, in a presentation focusing on Mubadala's strategic priorities, also announced advances in the company's aluminium and aerospace businesses.

Emirates Aluminium, the firm's joint-venture with Dubai Aluminium, would start producing its first hot metal in four weeks, he said. In aerospace, Mubadala plans to formally unveil its component-making arm, Strata, at the Dubai Air Show next week. The firm expects to begin producing components next year and has signed component contracts with Boeing and Airbus, Mr al Muhairi said. "Aerospace and semi-conductor clusters have some of the highest positive impacts on your economy," he said.

Even with the new investments, oil and gas remains a key part of Mubadala's investment portfolio, Mr al Muhairi indicated. "Mubadala produces something like 300,000 barrels per day of oil and gas right now, not a single drop of which is found in Abu Dhabi," he said. @Email:[e-mail]