Fairfield, Conn.-based General Electric (NYSE: GE) is forming a multi-billion joint venture with Abu Dhabi's Mubadala Development that covers clean energy research and development, commercial finance and aviation.

Mubadala is the investment arm of the Abu Dhabi government. The development group also controls the Masdar initiative, the government's umbrella group for all of its cleantech projects.

As part of the new partnership, which will be based in Abu Dhabi, GE will put up to $50 million into Masdar's second Clean-Tech Fund and will establish a clean energy technology center in Masdar City, Abu Dhabi's planned $22 billion zero-carbon, zero-waste, car-free city.

"It's a natural to be involved in Masdar City," said Jeff Immelt, chairman and CEO of GE, in a conference call. "We expect to hire probably 100 technologists as that facility gets built and we can house them."

In addition to the cleantech plays, GE and Mubadala plan to pump $4 billion each into a global commercial financial services business, putting the cash into the business over a three-year period.

GE and Mubadala have already been working together for more than four years, jointly managing the Mubadala Infrastructure Partners, an infrastructure fund. GE is also an anchor partner in the Masdar initiative.

The Connecticut conglomerate said it's been growing significantly in the Middle East, with the company's 2007 revenues in the region over $5 billion, up 50 percent over 2006.

GE said the new venture will invest globally, but that the region's companies and institutions represent a large customer base for its aircraft engines, healthcare and energy products and services.

"When I think about water desalination, solar energy, there's no shortage of investments that we can make," said Immelt.

"We have been very clear in our corporate strategy to say that we think renewable energy is core to the future of GE, as is clean water, and so I think some of those projects will be the early ones to inhabit the research center."

In addition to GE's infusion of cash into the Masdar Clean-Tech Fund, Mubadala will invest up to $200 million in GE Industrial Investment Partners, a new partnership of select global investors that will focus on providing growth capital to companies in the healthcare, energy, and transportation industries.

Mubadala also plans to become a long-term GE shareholder, with the expectation that it will become one of GE's top ten institutional investors through the open market.

"I think it makes a lot of sense for us to become shareholders in GE. We like the company. We think under Jeff's management this is an institution that has done extremely well," said Khaldoon Al Mubarak, CEO and managing director of Mubadala.

Mubadala will need to put up more than $3.4 billion to knock out GE's current No. 10 institutional investor, Charlottle, N.C.-based Bank of America, which holds 119.6 million GE shares.

"We think it's valued today attractively, from our perspective," said Mubarak. "We think it makes sense from the overall partnership arrangement that we have with GE."

Mubarak did not disclose how big of a stake his group plans to buy or when, but said that Mubadala does not currently hold any shares in GE.

The two companies also plan to work together on aviation and oil and gas, as well as corporate learning. GE will expand its work with Mubadala's Abu Dhabi Aircraft Technologies, as well as its work with Gulf Turbine Services, a joint venture of GE and the aircraft technologies group.

In corporate learning, GE will set up an executive education program in the Masdar facility to host the region's business leaders and GE executives for training. That program is expected to launch by the first quarter of 2009.