General Electric to invest $2 billion in Africa

 

The Central Bank of Kenya. Photo/FILE

By VALERIE VOLCOVICI, Reuters

In Summary

• General Electric has pledged to invest $2 billion in Africa by 2018 to boost infrastructure, skills and access to energy.
• CEO says rich natural resources and potential swell in local demand for electricity primed the region for investment.
• The company also extended by five years an agreement with Nigeria to spur the development of infrastructure projects.

General Electric has pledged to invest $2 billion (KShs175 billion) in Africa by 2018 to boost infrastructure, skills and access to energy.

The Monday announcement was timed to coincide with a United States summit meeting of nearly 50 African leaders.

 

US companies still have opportunities to catch up to China, Europe and Japan, who have made bigger strides in investing in the fast-growing continent, GE Chief Executive Officer Jeffrey Immelt said.

"The growth is real. I think, for American companies, this is an opportunity to seize upon," Immelt told reporters at a summit-related event in Washington. "This is a good catalyst for growth and a big opportunity for the company."

Immelt said Africa's rich natural resources and potential swell in local demand for electricity primed the region for investment.

"What you have is huge demand and actual supply, and what's in the middle is gaps in financing and technology and localization," Immelt said. He also cited political volatility as a risk.

But the CEO said the rewards outweigh the risks.

READ: GE taps smart solutions to Kenya’s energy crisis.

US officials said the summit is aimed at showcasing American interest in the region through a series of government-private partnership deals.

GE's investments include deals to work on increased electric grid reliability during peak power demands in Algeria and to generate uninterrupted power for the Nigerian National Petroleum Corp's state oil refinery.

The company also extended for five years a "country-to-company" agreement with Nigeria to spur the development of infrastructure projects and the transfer of skills and technology, and an investment of $1 billion in railway and power equipment in Angola.

That deal was signed under a bilateral agreement between the US Export-Import Bank and Angola’s Ministry of Finance to finance infrastructure projects in the country.

Immelt reiterated his support for the Ex-Im Bank, which will be forced to close if Congress does not renew its charter by September 30.

The bank provides loans, loan guarantees and credit insurance to help private companies export goods overseas.