Jeff Immelt Signs GE for $1 Billion of Manufacturing and Power Projects in Nigeria

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--General Electric Company (NYSE:GE) (GE) (Fairfield, Connecticut) is cementing its ties with West and Central Africa by signing deals to invest in manufacturing and power generation facilities. This news came after GE's chairman and CEO, Jeff Immelt, visited the continent last year when the company promised major medium- and long-term development and power projects, including 10,000 megawatts (MW) of power generation. For related information, see March 27, 2012, article - GE Signs $10 Billion Agreement for 10,000-Megawatt Power Build in Nigeria.

Last week, the Nigerian federal government and GE signed a $1 billion investment deal to establish a new manufacturing and assembly facility in Calabar Cross River, the capital of the Cross River state.

This followed the signing of a joint development agreement between GE and local power company Geometric Power Limited (GPL) (Abuja, Nigeria) for the development of a 450-MW thermal power plant to be sited at Aba, in the Abia state. The project will involve an investment of $500 million. GPL is also set to inaugurate a 140-MW project at Aba, where GE has supplied the turbines.

The manufacturing memorandum of understating was signed by the Minister of Trade and Investment, Olusegun Aganga. Jeff Immelt said that his company's investment was based on the country's positive macroeconomic indicators. The deal covers $250 million of capital expenditures and about $800 million of incremental spending on the local sourcing of goods and services. The project is expected to create 2,300 jobs and make Nigeria the regional hub for GE's manufacturing service and innovation in Africa. It also will support the company's power generation, oil and gas and exploration activities.

Nigeria has experienced 7% gross domestic product growth over the last 10 years, Aganga said. "The days for exporting raw materials and jobs are gone. This is a new Nigeria, and a new Africa. I am delighted that GE is leading that effort on behalf of global investors. This investment is going into the free trade zone (FTZ) under my ministry. By investing in the FTZ, GE is supporting the federal government's policy for creating the FTZs, which is to industrialize the country, create jobs and generate wealth. Therefore, we are committed to making it far more efficient and supportive for foreign investors."

Immelt said that the new investment also would cover additional investment in the service workshops in Port Harcourt and Onne, and the $1 billion investment would be made over a period of five years.

The Export-Import Bank of the United States (Ex-Im Bank) has agreed to provide a $1.5 billion credit to support U.S. exports to Sub-Saharan Africa. Nigeria also has signed memoranda of understanding with Siemens AG's (NYSE:SI) (Munich, Germany) and Daewoo Engineering and Construction Company (KSE:047040) (Seoul, South Korea) for power plant development. Both companies will target 10,000 MW.

GE Oil & Gas and Angola's GLS Holding have formed a joint venture, GE-GLS Oil and Gas Angola, to support those sectors. An initial investment of $175 million will see the construction of a new manufacturing facility in Soyo, which will supply subsea equipment with local demand from Angola' petroleum sector, its first priority.

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