US multinational General Electric (GE) has said it has a "keen interest" in acquiring a concession worth around $2bn to revamp and manage railways in Nigeria.
GE told Reuters yesterday that the project would involve pulling together a consortium of co-developers and lenders.
Its statement to Reuters partially confirms a surprise announcement made by Nigerian President Muhammadu Buhari (pictured) earlier this month in which he said the US giant would be investing $2.2bn "in a concession to revamp, provide rolling stock, and manage" some of the country’s railway lines.
There was confusion over Buhari’s announcement when GE later said it would invest only $150m in various projects.
Now it seems Buhari was partially right, except that GE does not plan to fund the scheme on its own.
"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," GE said in a statement mailed to Reuters.
GE added that the concession was in the formal procurement process.
If GE does pursue the concession, it would mark the second case of rare American participation in African infrastructure development in recent weeks.
At the end of September it emerged that the US government and Bechtel were in discussions with Kenya’s government to deliver a PPP super-highway between Nairobi and Mombasa.
For decades China has been the uncontested leader in financing and building major infrastructure schemes in Africa, but now the US is showing signs of wanting to get involved.
If that is the case, America has a lot of catching up to do. Last month the Nigerian government signed two contracts valued at nearly $5.1bn with the China Civil Engineering Construction Corporation (CCECC) to build or modernise two rail lines.
President Buhari was elected last May on promises to cut corruption and overhaul the country’s inadequate infrastructure, but his ambitions have so far been thwarted by the plunge in the price of oil, on which government revenues depend – making foreign investment necessary.
Image: US Secretary of State John Kerry and Nigerian President Muhammadu Buhari meeting in Washington DC, 21 July 2015 (U.S. Department of State/Wikimedia Commons)