An Obvious Choice

General Electric (GE) established its regional headquarters in Panama in 2012. What have been the milestones for the company over the past two years?

GE has been in Panama since the construction of the Panama Canal, providing the equipment needed for its functioning. It was a major milestone for GE to create new technologies for transportation, hydraulics, power systems, and power control, even more because some of the original GE equipment from 1910 is still operational. More recently, GE has been providing products, technology, and financial solutions to Panama and other countries in Central America and the Caribbean. GE has a very important oil and gas operation in Trinidad and Tobago, while continuing our presence in the power generation, medical equipment, and jet engines markets to multiple customers in the region.

The company established its headquarters in Panama under Law 41 for Multinational Companies. What are the main advantages for establishing here and what is the importance of Panama for GE?

The most important advantage of Law 41 is the flexible regulatory framework, because under this legislation GE has been able to bring technology and train both locals and international customers in the latest technology. One point in case is the ninth worldwide GE Healthcare Global Services Training Center, opened in Panama City. Moreover, some of our global customers have their regional operations in Panama, which makes it only natural for GE to be located where our customers are.

GE is present in the 37 countries of Central America and the Caribbean. Which are the most important, operationally speaking?

Panama’s impressive economic growth and its logistical services, particularly in the aviation sector, are very important for us; but not less important than Trinidad and Tobago’s energy-intensive economy and its considerable industrial base that provides important market opportunities to our high-tech gas technology applied to natural gas liquefaction. The Dominican Republic, for example, is making important strides in improving its power generation market, and GE is there to support them with technology and high-efficiency power generating turbines. In Central America, we are making significant progress, not only in transmission control systems, but also by providing energy-efficient solutions based on gas availability, such as LNG or LPG.

Panama and Trinidad and Tobago have signed a Partial Scope Agreement for the exportation of gas. What is the impact of such agreements for Panama’s energy sector?

It is clearly a new opportunity to change the energy matrix in Panama. For the very first time, LNG is being considered as a possible fuel for electricity generation. Other countries in the region are also looking at the possibility to move into this cleaner fuel. LNG brings its own complexities as far as scale, volumes, and infrastructure requirements to receive and handle a completely new fuel. GE has the equipment, technology, and expertise to support LNG terminals and natural gas power generation, but one important step toward the use of natural gas in the region is associated with the integration of the Central America electric market. In the Caribbean, GE is supporting some of the local efforts related to this technology. For example, the Dominican Republic and Puerto Rico already have their own LNG terminals.

What role can public-private partnerships (PPPs) play in terms of the energy market regarding foreign investment?

PPP is a very useful concept, particularly when companies can operate in an environment where the initiative runs under a very clear set of rules, and regulation is unbiased toward any of the partners. We are looking at the new legislation being introduced in the region, and the definition of these structures and the financial requirements that will come along with these opportunities. We are committed to diving deep into these business opportunities and bringing our experience from other parts of the world to the region.

What is the view of GE in terms of corporate social responsibility (CSR) initiatives and sustainability?

Social responsibility is very important to GE everywhere we operate. You can tell it from the commitment of our workforce to do more, and reach out in our volunteers. Our commitment to design and manufacture products for the betterment of people all over the world, particularly products that will be in operation for decades, is also important. With “ecomagination,” GE dedicates a significant amount of resources to design and produce technology that preserves the environment.

According to some sources, 17% of energy produced in Panama is lost due to faulty transmission lines. How would you evaluate Panama’s energy infrastructure?

Generally, infrastructure plays catch up with demand; and for this reason, systems need to work with some spare capacity. Electricity must move from generation to consumption, and the only way to do it is with adequate transmission and distribution lines. One cannot operate without the other.

What does General Electric foresee in the mid-term in Panama?

We are positive about Panama and not just because of its high economic growth rates, but because it is an excellent location to operate from. Central America and the Caribbean is a challenging region with new opportunities coming along at all times. GE arrived in Panama for the construction of the Canal, and, after a hundred years, there is no reason to move anywhere else.

© The Business Year – July 2014