The Czech Republic and GE sign an agreement on establishment of turboprop engine centre

21. 10. 2016 | Source: Business and Investment Development Agency (CzechInvest)

Czech firms will be involved in deliveries of components for production in the value of billions of crowns and Czech universities will engage in significant collaboration with GE.

GE Vice-President John Rice, Minister of Industry and Trade Jan Mládek and CzechInvest CEO Karel Kučera signed an investment agreement today, 20 October 2016, on the establishment on a centre for development, testing and production of Advanced Turboprop (ATP) engines.

At this time, the ATP engine is in the development phase, which involves the first one hundred of 500 employees that GE plans to hire in the Czech Republic in connection with the project. Production will begin at the end of 2022. The first phase of development, testing and production will take place at the company’s existing facilities in Letňany and will be subsequently transferred to new facilities, which are currently being sought.

"This centre places the Czech Republic among the global elite comprising only four countries that both manufacture and export aircraft engines. We are thus building on our rich aviation history based mainly on top-quality engineers," says Karel Kučera, CEO of CzechInvest.

GE’s investment is significant due to the that fact from the beginning it involves not only production, but also research and development. Previously, investors commonly first established production and expanded years later into research and development activities. At the same time, the investment may pay potentially result in half of the global market for this type of engine being served from the Czech Republic. For the Czech aviation industry, this could have a comparable sectoral effect to that which Volkswagen’s entry into Škoda Auto had on the Czech automotive industry.

CzechInvest and the investor are now in talks on the possible submission of an application for investment incentives. In any case, support in the form of investment incentives may not exceed 25% of eligible costs pursuant to the Investment Incentives Act. The amount of GE’s investment is not known at this time, though the company plans to invest an estimated USD 400 million in Europe, of which a large part will go to the Czech Republic, in connection with the project.

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