SNC-Lavalin and ABB power joint venture to have backlog of over $500m

21 December 2017
Formalities for the new entity are expected to be finalised in the second quarter of 2018

The joint venture (JV) entity that Swiss industrial technologies provider ABB will form with Canadian engineering major SNC-Lavalin to work on engineering, procurement and construction projects in the power sector, will be in control of an order backlog of $500m, MEED has been told.

“These (power) projects are located globally, including in the Middle East,” a source at ABB has said, adding that the formalities for the JV are expected to close in the second quarter of 2018.

ABB on 20 December announced it had signed a JV agreement with SNC-Lavalin to form a common firm, in which the latter will have the larger stake, to execute EPC work for electrical substations projects with a capacity of 66kV AC and above.

While ABB will play the role of supplier for the JV, providing electrical substation technology and products from its Power Grids division, SNC-Lavalin will execute the engineering aspect of the power projects, the source said.

Zurich-headquartered ABB has said the JV decision is part of its ‘Power Up’ programme, as well as aligned to its larger corporate strategy, to implement operational efficiency measures, and shift focus towards solutions and service-based customer offerings.

ABB says its fourth quarter 2017 results of its Power Grids unit is expected to be impacted by approximately $75m on operational EBITA (earnings before interest, taxes, depreciation, and amortisation).

SNC-Lavalin says the JV is oriented with its new ‘client-facing structure’ announced in November, creating a ‘Clean Power’ sector that will seek to work on projects in emerging sectors such as hydro, transmission and distribution, renewables and energy storage, apart from its core strength in oil and gas engineering.

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