U.S. conglomerate, General Electric (GE), has confirmed that it has a “keen interest” in acquiring a Nigeria railway concession project worth around $2 billion.
President Muhammadu Buhari had during his independence broadcast to the nation disclosed that GE would be investing $2.2 billion in a concession to revamp, provide rolling stock, and manage some of the country’s railways.
“On railways, we have provided our counterpart funding to China for the building of our standard gauge Lagos-Kano railway.
“General Electric is investing two point two billion USD in a concession to revamp, provide rolling stock, and manage the existing lines, including the Port Harcourt-Maiduguri Line. The Lagos-Calabar railway will also be on stream soon,” the president had said.
Confirming the $2 billion investment yesterday, GE, in a statement to Reuters, said: “Given the size and scope of the proposed project, it is likely that the debt and equity commitments required from lenders, consortium partners and other co-developers will be in the range of $2 billion or more.”
It said the concession was in the formal procurement process.
Nigeria has been looking for partners to overhaul its aging railway system, which was mainly built by British colonial rulers before the country’s independence in 1960.
The country has also signed two deals worth around $5 billion with China Civil Engineering Construction Corp (CCECC), part of China’s state-owned railway construction firm, to modernise and build railways in the north and south of the country, the Ministry of Transportation said last month.
Growth in Nigeria – an OPEC member country whose economy has slipped into recession for the first time in more than 20 years after being hammered by low oil prices – has been stunted for decades by a lack of investment in roads and railways.
GE said the railway concession project came on top of around $150 million the firm was currently spending on capital expenditures in Nigeria as cited by a senior company executive last week.
Jay Ireland, Chief Executive of GE in Africa, told the FT Africa Summit in London that the $150 million would be used in development projects.
GE would also invest in oil and gas industry projects, he added.
Ireland said the Nigeria investment was part of a plan to spend $2 billion in Africa in the coming years.