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Why is GE Investing $2 Billion in Africa by 2018?

Revenues exceed $5.2 billion across 30 African countries in 2013, making it the most promising growth region for the company. 

As GE is hosting President Obama’s U.S.-Africa Leaders Summit, the company announced on August 4 that it will invest$2 billion  in Africa by 2018.  The money will go towards facility development, skills training and sustainability initiatives across the continent.

Africa has been a good market for GE. “Over the last few years, we have expanded in growth markets by 15% each year,” said GE CEO Jeff Immelt said. “Our capability and culture give us great momentum in Africa and other developing regions around the world. We are solving problems for our customers and countries where we invest.”

Total GE revenues in Africa in 2013 were $5.2 billion and in the past year, GE has won more than $8.3 billion in orders across Africa.

Investment in Africa will be in three strategic areas: building infrastructure; delivering localized solutions to customers; and capacity building, by providing skills training and growing supply chain development in local communities.

New GE commitments in Africa include:

  • GE’s Distributed Power business will supply aeroderivative gas turbines in 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. As a founding partner for President Obama’s Power Africa initiative, GE committed to help bring online 5,000MW of new electric generation capacity in cooperation with the Initiative’s government and other private sector partners across six partner countries, including Nigeria.
  • GE’s “Country-to-Company” agreement with the Government of Nigeria, which encourages the development of infrastructure projects and the transfer of skills and technology, will be renewed for another five years.
  • GE will supply approximately $1 billion in railway and power equipment to Angola, under a bilateral agreement signed this week between the Export-Import Bank and Angola’s Ministry of Finance to finance infrastructure development projects in the country.
  • The GE Foundation will invest $20 million over the next five years in health programs across Africa – including Nigeria, Kenya, Ghana, Rwanda, Uganda, Tanzania and Malawi – to train nurse anesthetists and biomedical equipment technicians, among other healthcare initiatives.

“GE has long been committed to unlocking Africa’s potential but, as our most recent deals in the region demonstrate, we believe there is still more that we can do,” said Jay Ireland, CEO of GE Africa said.

Other commitments and recent announcements in Africa include:

Building Infrastructure

Core infrastructure needs in Africa represent a $90 billion opportunity. GE’s advanced technologies generate 25% of Africa’s gas power, and nearly 70% of the electricity distributed across Algeria.

  • GE and Dangote Industries, one of the largest diversified industrial conglomerates in Africa, signed a strategic cooperation agreement last year, and a framework agreement for distributed power solutions this year. The partners will collaborate on major infrastructure projects – in power generation, rail transport, and the oil and gas sector.
  • GE and the Tunisia Ministry of Development and International Cooperation signed a “Country-to-Company” MOU agreement, committing to develop local infrastructure through partnerships in transportation, healthcare, and electricity sectors.
  • GE recently announced plans to invest in the Ghana 1000 project, which aims to bring 1,000 MW of power online over the next six years.
  • GE South Africa Technologies has committed to supply Transnet with 233 locomotives, as well as develop a Supplier Development Fund with IDC and IFC that fosters the growth of subject matter experts throughout the GE supply chain in Africa. The partnership with Transnet has created hundreds of skilled jobs on both continents. With this new order, GE will be delivering 436 new locomotives operating in South Africa by 2017.
  • In Algeria, GE is investing with partner, Sonelgaz, to build a new production plant manufacturing steam turbines, gas turbines, generators, and control systems that will deliver approximately 2 GW per year to meet the country’s growing electricity demand.
  •  GE received orders in Mozambique for 100 locomotives between 2012 and 2014. In early 2014, GE Transportation delivered the first four of 10 C30ACi locomotives that were ordered in 2012 to CFM (Portos e Caminhos de Ferro de Moçambique). GE will provide services and skills training in Mozambique. For this order, the engines are made in Pennsylvania and the locomotives are assembled at Transnet Engineering plant in South Africa.

Localized Solutions

The company is working with partners in Africa to drive sustainable development and solve local challenges by investing in technology, building capital markets and developing technical skills within communities.

“Together with our regional partners, GE is elevating transformative ideas that have the potential to solve local challenges by lending scale and resources,” said  Nabil Habayeb, CEO of GE Middle East, North Africa & Turkey.” GE is committed to empowering the communities in which it operates across the continent.”

Projects include:

  • In Calabar, Nigeria, GE is investing more than $1 billion over five years to build technical expertise and infrastructure capacity across various sectors of the Nigerian economy. The investment includes $250 million toward a new multi-modal facility for manufacturing and assembling machinery that will create 2,300 new local jobs.
  • As part of a $500 million agreement with Egypt’s Carbon Holding, GE will deliver an integrated solutions package featuring technologies and equity in one of the world’s largest petrochemical projects.
  • By 2017, GE will invest $70 million into a Customer Innovation Center for skills development in South Africa, as well as $19 million into supplier development funds to provide financial and technical support for emerging local businesses.
  • GE will provide an additional $350 million in services and technology to Nigeria’s subsea industry, including hiring of local field engineers and deployment of solutions from GE’s Oil & Gas business.
  • In collaboration with the U.S. Africa Development Foundation and USAID, GE launched the “Power Africa Off-Grid Energy Challenge” and awarded six $100,000 grants to local enterprises to develop and expand off-grid solutions. Now in its second phase, the challenge has expanded to cover all six Power Africa countries by including Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania.
  • Together with the Federal Ministry of Health and USAID, GE Healthcare has entered into a $20 million five-year initiative to reduce child-maternal deaths in Nigeria. This partnership entails forming a new healthymagination Mother and Child Initiative as well as supporting the ongoing efforts of the Ministry of Health’s “Save One Million Lives” program, which tackles maternal and infant mortality in Nigeria.

Capacity Building

The company is also involved in providing skills training and developing leaders through partnerships with local governments, schools, and hospitals.

  • Through its Apprenticeship program, over the next four years, GE Africa will spend up to $45 million to develop local Angolan talent. As part of its work with the Young African Leaders Initiative, GE will support YALI Regional Leadership Centers curriculum development, provide facilitated leadership training, and volunteer GE staff members to serve as mentors to youth.
  • In Algeria, GE is partnering with the Ministry of Health to improve emergency care, modernize hospitals and support the government in developing 10 new teaching hospitals. GE launched its healthymagination program in Algeria in May, focused on consumer education and awareness of disease prevention.
  • In partnership with AMIDEast, GE is investing in teacher training programs focused on increasing capabilities in the public education system in Libya, Tunis and Egypt.
  • GE, Dangote Foundation and other partners are collaborating to create a skilled workforce in Nigeria. Both organizations are focused on training young people in order to maximize their potential for employment. Garages is designed as a convention for hands on training, work placement opportunities, and a leadership program designed for graduate students in manufacturing and various service industries.

“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 center in South Africa, we remain a committed partner to Africa’s sustainable growth,” said Immelt.

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