Jay Ireland of GE Africa
GE - Powering Africa
The World Bank estimates that about 550 million people in Africa are without access to electricity. This number is expected to rise 90 to 100 million by 2030.
US President Barack Obama recently announced his ‘Power Africa’ initiative. He described the energy plan as “a new initiative that will double access to power in sub-Saharan Africa.” One of the key partners of President Obama’s ‘Power Africa’ is GE, General Electric. In an exclusive interview TABJ spoke with Jay Ireland, President and CEO of GE Africa. We asked about President Obama’s plan, the company’s role in Kenya Vision 2030 and if GE’s recent expansion in Africa is in response to China’s growing presence on the continent.
You’ve been living in Kenya for the last two years. What’s it been like living there? Have you become addicted to the orange Fanta soda or any local food? What’s your take on Ugali?
It has been two and ½ years and it has gone by very fast and so far so good. Living in Kenya is great as the weather is good, the people are hospitable and it’s a strategically positioned gateway for ease of travel to the rest of Africa. In my role I do plenty of traveling across Africa. Yes Kenya also offers additional perks such as having a consistent and abundant supply of organic fruits and vegetables throughout the year and local treats like the orange Fanta Soda.
Generally there are a lot of misconceptions about Africa. What do you think are some of the biggest when it comes to doing business on the continent?
True, until you are here on the ground and are doing business on a day to day basis, you may be gullible to some of the exaggerated misconceptions about Africa. Look I am in no way saying Africa is perfect, however the one consistent misconception that people from outside of the continent are exposed to is that Africa is one big homogenous place riddled with corruption, poverty and under development.
If that was the case, we would not have some of the fastest growing economies globally coming out from Africa. In-fact all the foreign investment that is being directed into the continent is an indication that the opposite is true. Africa has its fair share of risks and opportunities but what is important to note is that it is a big continent made up of 54 independent countries that are experiencing different levels of growth and development. They have their own individual market dynamics that present challenges and or opportunities that are specific to each market. For instance some are more developed than others, some have serious governance issues to overcome whilst others are respected for good governance and so on.
How many countries does GE operate in; in Africa and which countries are you focussed on?
All in all we have a presence in 35 countries with five key markets that we are aggressively targeting and these are Angola, Kenya, Nigeria, Ghana and South Africa. This allows us to focus our investments strategically as we understand that we cannot be everywhere at the same time, otherwise we risk spreading ourselves too thin. However it is worth mentioning that our business footprint is also rapidly expanding in Ethiopia, Rwanda, Cote D I’voire and Tanzania.
What are the key sectors GE is looking to invest in? Why?
We are an infrastructure company and our business cuts across key sectors of the economy. We operate in the energy, healthcare, oil and gas and rail transportation sectors. We are increasing our investments in some key markets focusing on the sectors with the highest growth prospect in each market. For example we are making a $ 300 million investment in Nigeria for a multi-modal manufacturing and assembly facility to be located in Calabar, Cross River State. This will service our energy and oil and gas businesses both of which are set to grow and expand in Nigeria as the country increases its power capacity and expands its oil and gas revenue generation opportunities. In Angola we are looking to invest in a sub-sea assembly facility and looking at other opportunities for assembly in country as well. In South Africa we will be investing in a Customer Innovation Centre which will primarily support our rail transportation businesses that will provide maintenance, assembly and manufacture of locomotives in South Africa for the African market. The centre will provide a pipeline of skilled engineers that over time will be used as a feeder into all of our businesses.
What would you say is the most important service that Africa is currently lacking the most? Why?
Without a doubt, I would say its electrification because without electricity Africa will not be able to realise its full growth potential. Access to affordable, consistent and sufficient power supply is critical for both business especially manufacturing concerns and households who depend on it for day to day living.
GE has had a presence in Africa for a long time. GE’s first African office was established over a century ago in 1898? Why is it a good time now to expand your presence on the continent?
Yes, it is true that we have had a presence in the region for a while, however just over two years ago, the Company decided to restructure and place more emphasis on emerging markets. With that came the repositioning of Africa as an independent region where previously it was a part of the Europe, Middle East and Africa (EMEA) region. This necessitated consolidating our go to market strategy for the region. Like all the other emerging markets, Africa is experiencing rapid growth and this will in turn necessitate an expansion on our end to meet the escalating demand for our product offerings across key sectors of the economy.
How is GE involved with President Barack Obama’s ‘Power Africa’ initiative? What role do you play?
We are playing a significant role in President Obama’s ‘Power Africa’ initiative. We have energy projects in Nigeria, Ghana, Kenya, Ethiopia and Tanzania which is in line with the initiative. We recently signed a 400MW Joint Development Agreement with Symbion Power Tanzania for the development of a natural gas-fired power plant for Tanzania Electricity Supply Company (TANESCO). This was the anchor project that President Obama used to launch the initiative when he visited the Ubungo Power plant in Tanzania during his recent visit. We are excited to be a part of this much needed economic intervention aimed at combining $7 billion in U.S. support with more than $9 billion in commitments from the private sector to help U.S. companies build independent power plants in the region.
In addition to this, we also partnered with the United States African Development Foundation (USADF) to launch and co-fund the Power Africa Off-Grid Energy Challenge (the Power Africa Challenge), a three-year, USD $2 million challenge. The funding will award 20 or more grants of up to $100,000 each to indigenous African organizations providing off-grid solutions that deploy renewable resources and power economic activities.
Africa has been called the final frontier for business. China’s presence in Africa has been heavily debated over the last decade or so, is that why GE is looking to expand there?
No. GE has been steadily growing its business in Africa way before the spotlight was placed on China’s investments into Africa. We often get asked whether we see China’s increasing presence as a threat to our market share. The answer again is no as we believe the opportunities are aplenty for everyone.
Will American companies be able to compete against the Chinese companies who have already established a presence?
Yes. I believe all companies will be able to compete as long as the playing ground is level. Africa offers immense opportunities and a fairly open market in which those who are willing to offer long term solutions to Africa’s current challenges will succeed. I believe GE offers that and more in that we go into every transaction with the sole objective of adding value and building mutually beneficial partnerships that are geared to improve the lives of citizens.
Can you please tell us about GE’s involvement with the Kenya 2030 initiative? What role will GE play?
Certainly, in May of 2012, we signed a Memorandum of Understanding (MOU) agreement with Kenya to develop projects in key sectors such as power, rail, healthcare, aviation and training & capacity building to deliver on the country’s Vision 2030 plan. Through this MOU we agreed to partner with Vision 2030 on Kenya’s infrastructural development projects including Wind Energy development, the refurbishment of rail locomotives in partnership with the Rift Valley Railways and also the provision of much needed technological equipment in the healthcare sector.
For example, the Rift Valley Railways partnership entails upgrading of locomotives for efficiency, signalling, environmental friendly operations, and supply of new locomotive units, subject to conclusion of negotiations with RVR. The deal with the Vision 2030 secretariat also involves training of engineers and technicians at the Kenya Railway Institute.
GE has a strong history with Tanzania. Can you tell us about your relationship with Tanzania?
Yes we have a good and growing relationship with Tanzania; we have been an infrastructure partner in Tanzania since the 80s, supplying parts and services to the rail sector – TAZARA (Tanzania Zambia Rail Authority). Since 2005, Songas and GE have worked together successfully operating and managing their aero derivative power generation units that produce 189MW – 13% of Tanzania’s installed power. We recently signed a “Cooperation Agreement” with Symbion Power Tanzania Ltd. to develop a 400MW gas-fired power plant in Mtwara to boost electricity in the south and the rest of the country. This project which is the Power Africa initiative project I mentioned earlier will be located in Mtwara, and is part of expansion plans for TANESCO and will also include a transmission line from Mtwara to Songea.
On a social level we have partnered with the University of Dar es Salaam on curriculum development and laying a foundation to jointly increase oil and gas industry expertise in Tanzania.
West Africa is a key region for you. Can you tell us about the work you’re doing there especially in Ghana?
You are right to say that West Africa is a key region for us. Let’s start with Nigeria, which is the biggest market in West Africa. GE has built a very large platform in Nigeria that covers all sectors of GE businesses - Oil and Gas, Power and Water, Energy Management, Aviation, Healthcare, Transportation, GE Capital and Home & Business Solutions. GE businesses in Nigeria represent the biggest GE platform on the continent of Africa where about one third of the entire GE Africa business comes out of Nigeria.
In the past two years, we have renewed our focus in Nigeria increasing our GE footprint in Nigeria to about 400 employees with offices in Lagos and Abuja. We also have service facilities in Port-Harcourt and Onne. We currently serve with over 100 public and private sector customers and partners in Nigeria. As part of a $300 million investment in Nigeria over a 5-year period we are building a manufacturing and assembly plant in Calabar which will give us an improved ability to support a broader range of product lines in power generation as well as oil and gas exploration. The planned investment is expected to create 2300 jobs, 300 of which will be direct GE hires and the remaining 2000 indirect jobs created through GE suppliers that will support its expanded operations. The Calabar factory will become a supply hub for manufacturing, service and innovation for the West African sub region.
In the Power sector, we signed an MOU with the Nigerian Government to help develop an additional 10,000MegaWatts of power over the next ten years. This is a very serious commitment. GE will make Equity commitments as well as provide project development expertise to repower existing brown field facilities. It may interest you to know that about 60% of all the installed Power generating capacity in Nigeria today is GE technology so we have a very long history of building the foundations of the power sector. In fulfilment of the Power MOU, we have partnered with local companies through Joint Development Agreements to bring incremental power to the national grid.
In the Transport sector we are looking at participating in rail projects along with the Nigerian Government which is investing in the rehabilitation of the existing railway infrastructure. These projects will boost the economic growth of the country and as some of these Projects are PPP, an exchange of expertise and regulation know how will take place.
In Ghana we signed a Memorandum of Understanding with the Ministry of Energy and Petroleum to support the nation’s power generating capacity. Under this MOU, GE will be facilitating the development, financing and technical partnership required for the implementation of an incremental 1000MW of power in collaboration with the Government of Ghana over the next 5 years. The agreement comes on the heels of the Government’s proposed target to generate a total of 5000 Megawatts by 2016. The Ghanaian government has also launched a Power Park Concept through which it hopes to generate 1000MW of power.
The beauty of this plan is that it will enable lower cost of power and faster implementation. GE plans to develop the Power Park in collaboration with private sector partners and investors as well as to develop local capabilities and service providers in Plant Operation and Maintenance.
GE is known as one of the best companies to work for worldwide. Why? What makes GE unique?
GE’s first and foremost commitment is to its people. The company invests in excess of $1 billion globally in training and development of its people. We also offer a very supportive work environment that encourages a culture of continuous self-development supported by our leadership programs. We operate in 160 countries around the world and are in key infrastructure businesses which helps solve the world’s issues. We have plenty of opportunities for motivated, bright people to make a difference.
Staff is integral to any business. How does GE retain and motivate its staff?
GE offers vast opportunities for our employees such as the opportunity to do International assignments as well as recognition for good performance. The diverseness of the company also means that our employees have the rare opportunity of growing across different sectors and industries without changing jobs.
What factors do you attribute to GE’s success?
GE is a customer centric company with a continuing focus on developing technologies that will positively impact our customers. We have continually adapted our business portfolio and have focussed on global growth.
Can you tell us about some of the regional projects that GE Africa is working on, for example the Power Africa Challenge?
Yes. The Power Africa Challenge is a three-year, USD $2 million challenge organized by USADF and GE aimed at supporting local energy solutions to meet the needs of African enterprises and communities, underserved by existing capacity. Challenge award winners will qualify for up to $100,000 per award, with 5-10 awards per year. This is a first of its kind as it will ensure that Africans are at the forefront of driving innovation that will solves Africa’s challenges in the energy sector.
It will help countries develop newly-discovered resources responsibly, build out power generation and transmission, and expand the reach of mini-grid and off-grid solutions. As Power Africa is rooted in partnerships, USADF and GE are collaborating on this project to provide grants for developing or expanding the use of proven off-grid electricity technologies benefitting rural and marginal populations. For now the challenge will cover Kenya and Nigeria and will expand to other countries in the following years.
As an industry leader, what would you say is the single most important characteristic that drives people to be successful in the business world?
In my experience, integrity is the one valuable characteristic that is paramount. It is a measure of your personal commitment to doing things the right way and is part of your personal brand.
Looking toward the future, perhaps in the next 5 to 10 years, what are the goals of the company? For GE Africa?
Our goal is to grow GE Africa at a strong double digit rate. We will see continued expansion of our footprint across the Sub Saharan region, with a continued focus on developing Africans to assume senior leadership roles. We are excited about the potential of Africa and our ability to help the region achieve its goals of economic growth.