No Financial Borders

Interview by Helmut Sendner, Contributing Editor, with Dr. Fritz P. Ruess, Siemens Power Ventures Inc., Managing Director, Erlangen, Germany

Sendner: Dr. Ruess, would you tell our readers a little about Siemens Power Ventures Inc.?

Ruess: Siemens Power Ventures was founded in March 1995 in New York, USA, with a mandate to develop and finance build-own-operate (BOO) projects and IPPs. A second Siemens Power Ventures group is located in Erlangen, Germany. The New York office serves the US, Mexican, Canadian, and Latin-American markets; Erlangen takes care of the rest of the world.

Sendner: Dr. Ruess, is the establishment of the Siemens Power Ventures Inc. a sign that the KWU has switched from reactive to proactive concerning BOO projects?

Ruess: It is certainly a sign of that, because we are already part of many such projects and the power plant supplier business should separate from the partnership side of the business.

Sendner: It has always been the philosophy of Siemens to only engage as an operator in projects where Siemens is also the main equipment supplier for the power plant. Is this still the policy?

Ruess: That is still the policy. Having a contract to operate a power plant also helps other Siemens business units.

Sendner: Your colleague Rudolf Hoefling, Siemens Power Ventures Inc. president in New York, USA, has talked about Siemens only staying five years in projects, taking the profits and using the money to develop new projects. Is that your strategy, too?

Ruess: Concerning time, I would want to leave my options open; it is true that we want to make as much business as possible with our own capital funds, which means that one does not stay in such projects ad finitum. Naturally, the time one stays in a project depends on many factors, including the partners and the terms for paying off the debts. If it makes economical sense, then we would leave a project.

Sendner: What are your financial limits?

Ruess: Siemens has not set any limits. In our latest project in Indonesia we are investing (US)$200 million of our own capital funds.

Sendner: Is the construction of a BOO nuclear power

plant imaginable?

Ruess: No, it is not. Not only because we do not want it, but the financial market will not finance such a project. The risks and uncertainties involved in the construction of a BOO nuclear power plant are not the same as those involving an IPP.

Sendner: Which countries will be the center of your work?

Ruess: The ASEAN-market is our priority at present, but Latin-America is becoming increasingly more important. We also have a number of projects in India, Pakistan and China.