IAI sets up €43m wind turbine joint venture

Each turbine will have three megawatt capacity, and can be installed on land or at sea.

Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) will set up a €43 million joint venture with a foreign company to develop, manufacture, set up, and license wind turbines for the production of electricity. Each turbine will have three megawatt capacity, and can be installed on land or at sea.

IAI and its partner, whose name the company did not disclose, will own the joint venture in equal shares, and they will share profits from any future sales. The partner will transfer all its intellectual property rights for the wind turbines to the joint venture.

The companies will set up two wind farms as a pilot program to test the turbines, after a three-year development program.

IAI said that its partner is a leading infrastructures mechanical equipment manufacturer.

IAI plans to enter the renewable energy business, where it has never operated before, in the coming years. The company is also developing next-generation land warfare systems. Sources at the company believe that these programs will generate substantial revenue for the company, which until now focused on aerospace products for the military and civilian markets.

IAI decided to speed up its renewable energy program because of the slump in demand for executive jets, which began with outbreak of the global economic crisis in 2008, and has not yet recovered. IAI's executive jets business has accumulated heavy losses and the company has transferred employees to other divisions.

Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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