No upfront payment, no work: GE Vernova puts repairs to Venezuela’s power system on hold

The company says it has the suppliers ready, but won’t lift a finger until it sees the funding

U.S. company GE Vernova will not begin repair work on Venezuela’s deteriorating power grid until it receives the government’s first payment, its CEO, Scott Strazik, said, according to international news outlet Bloomberg.

The company has already completed the engineering and planning work and has contracted the necessary suppliers. However, it has not yet issued formal work orders while the government currently running Venezuela restructures its processes for doing business with international companies.

“This is not a market environment in which we’re going to execute without being paid upfront before we start work, apart from the planning, and we’re really waiting for the first capital injection,” Strazik said in an interview with Bloomberg.

GE Vernova signed a memorandum of understanding with state-owned Corpoelec in June and, on September 2, a broader agreement to restore thermal and hydroelectric power generation, transmission and distribution grids, and substations. The plan calls for adding one gigawatt of reliable power in the first 24 months and five additional gigawatts over the following four years. Contracts for each individual unit have not yet been signed.

Venezuela’s power grid has suffered from decades of underinvestment and lack of maintenance. Experts estimate that at least $25 billion in investment is needed to restore it. Frequent blackouts affect daily life and oil production, one of the priority areas in the economic recovery process launched after the change in leadership in the country.

Strazik made these remarks on Wednesday, after GE Vernova reported better-than-expected third-quarter results and raised its outlook for the year.

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