GE's Immelt Leads Charge as U.S. Initiates Major Investments in Nigeria

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The U.S. government has confirmed that it is ready to invest $1.5 billion in the Nigerian power sector through private sector companies interested in entering the market.

As a member of an ongoing U.S. energy trade mission to Nigeria, Wanda Felton, the first vice president of the U.S Export Import Bank (Ex-Im Bank), said that the $1.5 billion would be only the first tranche of a broader spectrum of investment in Nigeria's power generation, transmission and distribution. She added that the funds certainly would develop into higher investments as they progressed. This follows the signing of a memorandum of understanding between the Ex-Im Bank and the Nigerian power ministry in the capital, Abuja, in October 2011.

For related information, see October 25, 2011, article - U.S Ex-Im Bank Provides $1.5 Billion to Nigeria's Power Drive, Eyes $220 Billion Infrastructure Projects, and February 6, 2012, article - U.S Energy Trade Mission to Africa to Encourage Private Sector Investment.

"We want to attract U.S companies into the Nigerian power sector," said William Fitzgerald, the U.S. Deputy Assistant secretary for African Affairs. "We do not want them to miss out." He added that the mission also would provide finance and investment for companies investing in the power sector, which require a lot of capital. "We want to be there to provide capital to help Nigeria complete the reform process," he said. "We provide the lowest cost of financing, and this is another area where we can compete well."

Earlier this month, General Electric (NYSE:GE) CEO Jeffery Immelt said that the company would be making investments in Nigeria in a matter of months, with a focus on the country's rail and energy sectors. Plans were outlined that will transform GE's presence in the country from that of a trader to a major business that promotes manufacturing and then sells products in West Africa and sub-Saharan Africa.

The projects will include a manufacturing plant for rail components and parts. Another will see a modern service shop set up to maintain the growing range of gas turbines for the country's power sector.

"We have chosen to invest in local manufacturing, hire local teams, build a base in Nigeria that allows us to service this market and the whole of West Africa, and we are good to go," said Immelt, who heads President Barrack Obama's job creation council in the U.S.

Stressing the need for infrastructure development and the achievement of national goals, Immelt set the goal of adding 10,000 megawatts (MW) of power by 2020--perhaps more realistic than the 40,000-MW target set by the Nigerian government.

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