Out-Law News | 05 Aug 2014 | 3:32 pm | 2 min. read
GE’s announcement was made on 4 August, as African business chiefs and heads of state and government gathered in Washington DC for the first ‘US-Africa Leaders Summit’ hosted by President Barack Obama.
Africa has emerged as “the most promising growth region” for GE, with revenues exceeding $5.2bn across 30 African countries in 2013, the company said. GE said it had secured more than $8.3bn in orders across Africa over the past 12 months.
GE’s distributed power business is to supply aero-derivative gas turbines to Algeria and Nigeria “to increase grid reliability during peak power demands in Algeria and generate uninterrupted power at the Nigerian National Petroleum Corporation's state oil refinery”, the company said.
A ‘country-to-company’ agreement between GE and Nigeria’s government will be renewed for a further five years to encourage “the development of infrastructure projects and the transfer of skills and technology”, GE said. The company will also provide an additional $350 million in services and technology to Nigeria's subsea industry.
Around $1bn worth of railway and power equipment will be supplied by GE to Angola, under a bilateral agreement signed this week between the Export-Import Bank of the United States and Angola's finance ministry.
The chairman and president of the Export-Import Bank of the US, Fred Hochberg, said earlier this year that the bank wanted to be a “full partner” in Africa. Hochberg said: “In the last fiscal year alone, we authorised $604m to support the export of US products and services to 35 of the 49 countries in sub-Saharan Africa. But we are looking to expand our engagement in order to keep up with economic growth in Africa and support jobs here at home.”
The three-day US-Africa summit is focused on identifying opportunities for investment, infrastructure, and innovation in Africa. On 5 August, the US commerce department and Bloomberg Philanthropies will co-host the ‘US-Africa Business Forum’. The US said the forum will discuss “US private sector engagement in Africa in the areas of finance and capital investment, infrastructure, power and energy, agriculture, consumer goods and information and communication technology”.
According to GE, “core infrastructure needs in Africa represent a $90bn opportunity”. The company said it is already supplying technology to help generate 25% of gas-fired power in Africa and “nearly 70% of the electricity distributed across Algeria”. GE is also a founding partner of the Power Africa initiative launched by President Obama in 2013.
Following agreements signed in 2013 and earlier this year, GE will collaborate with Dangote Industries, one of the largest diversified industrial conglomerates in Africa, “on major infrastructure projects in power generation, rail transport and the oil and gas sector”.
Earlier this year, GE delivered the first four of 10 locomotives to Mozambique that had been ordered in 2012. For this order, the engines are made in the US and the locomotives are assembled at the Transnet Engineering plant in South Africa.
GE chairman and chief executive officer Jeff Immelt said: “I am proud of our 100-year history in Africa. Through investments such as our new multi-modal manufacturing facility in Nigeria, Algeria gas turbine manufacturing, and our customer innovation centre in South Africa, we remain a committed partner to Africa's sustainable growth.”
A 2014 World Bank report said net foreign direct investment inflows to sub-Saharan Africa (52-page / 3.78 MB PDF) increased by 16% to a near-record $43bn in 2013, driven by new oil and gas discoveries in countries in the region such as Angola.