GE Invests Nearly $3 Billion to Update Nigeria’s Railroads
- Approximately 2,500 miles of Nigeria’s rail network is narrow-gauge
- GE to invest up to $2.7B along with consortium partners
Nigeria has been looking for partners to overhaul its aging railway system and it seems General Electric (GE -0.99%) has taken up the mantle. The company will invest around $2.7 billion along with consortium partners and other co-developers to complete the project.
Why This Matters: This marks one of the rare occasions an American company has participated in Africa’s infrastructure development. It all started two years ago when GE expressed its interest in Nigeria’s railway concession project. Through this deal the company will revamp the infrastructure, provide rolling stock, and manage some of the country’s railways. Most of Nigeria’s approximately 2,500 miles of rail network is narrow-gauge and long term neglect has led to the demise of this once-active network.
At a news briefing Fidet Okhria, Nigeria Railway Corporation managing director, explained GE would provide 200 new wagons and 10 locomotives to improve the operation of the narrow gauge lines. GE, which makes locomotives is joined in the consortium by China’s Sinohydro, a giant dam and infrastructure builder along with Transnet, South Africa’s state-owned rail and ports operator.
GE is also spending around $150 million on other capital expenditures in Nigeria. Right now the country and GE have only signed an interim agreement, which sees the consortium carrying out remedial works on some of the narrow-gauge rail networks to make it operable. So as the rehabilitation commences, both parties will work on finalizing the concession agreement.
What’s Next: For decades China has been the uncontested leader in financing and building major infrastructure schemes in Africa. Now the U.S. is showing signs of wanting to get involved. Be on the lookout to see how much more efficient Nigeria’s railways operate once the project is completed and if this leads to additional American companies getting involved in Africa’s infrastructure.
CBx Vibe: “Get Here” Oleta Adams
