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Chinese and US based vendors join forces in Africa on control and HV equipment

12 September 2013 – Africa’s economy is growing faster than any other continent, and one-third of Africa’s countries have GDP growth rates of more than 6% annually, according to the African Development Bank (AfDB). With tremendous economic and population growth comes a greater need to build out reliable, safe and efficient electrical infrastructure.

New York stock exchange listed GE and one of China’s largest manufacturers of transmission and distribution equipment, the XD Electric group, have formed a partnership that combines GE’s intelligent controls with XD Electric’s portfolio of high-voltage equipment. “In Africa, we’re focused on grid expansion projects and greenfield network interconnections as we continue to create a modern power grid that is stable, resilient and energy efficient,” Amen Saeed, senior product manager for GE’s Digital Energy Business says.

Luis Perez, general manager for EMEA, GE’s Digital Energy business (Africa), says, “Adding high-voltage capabilities will help our utility customers to transmit power with minimal losses over long distances and rough terrains — from the generation point to the consumers in large cities. We’ll also continue to eliminate power islands, creating energy reserves and allowing us to more efficiently use a greater supply of energy.”

Through the partnership, GE and XD will offer end-to-end transmission and distribution (T&D) solutions to meet growing demand for electricity in these emerging economies where demographic and urbanisation trends are creating a need to build out the current grid infrastructure. Today, 3.5 billion people, 50% of the world’s population, live in cities, and this number is expected to grow to five billion by 2030. This increase will require sustained electrical infrastructure investments to support water, power, energy and telecommunications systems. The rises in global electricity demand and population growth are economic drivers leading the expansion of the US$100 billion T&D industry.

To prevent grid disruptions and build a strong, resilient grid, utilities will be able to expand their T&D systems with high voltage (HV) transformers, circuit breakers, HV breakers, gas-insulated switchgear and other HV equipment to improve reliability.

The new GE and XD partnership has three major components:
A global partnership to combine GE’s intelligent controls and service capabilities with XD Electric’s portfolio of high voltage power equipment to offer customers an array of integrated transmission and distribution solutions.
A joint venture (JV) with XD Electric to offer customers in China GE’s localised intelligent controls and services.
GE’s 15% equity stake in XD Electric and a seat on XD’s board of directors.

Modernisation of electrical systems is contributing to the industry’s growth, driven by new requirements to integrate renewable and distributed power sources. The electrification of industrial processes in energy-intensive industries, such as mining and metals, also will drive electrical infrastructure investments as they upgrade their equipment to improve the efficiency of their operations.

“Global grid modernisation investments will grow by 10% over the next five years. This is a growth trend we are prepared to support and have begun to engage customers in fast growth regions like Africa,” Robert Turko, general manager, power delivery, at GE’S Digital Energy Business, says.

Citigroup acted as sole financial advisor to GE on this transaction. Weil, Gotshal & Manges LLP and Fangda Partners are GE’s lead legal advisers.