- Access to XD Electric's High-Voltage Equipment Positions GE to Lead in the Build Out and Upgrade of Electrical Infrastructure in Africa
- GE is Bringing Technology and Expertise Closer to Its Customers to Build and Modernize the Electric Grid
- Investment Allows GE to Better Serve Utilities and Energy-Intensive Sectors That Demand Reliable Power such as Oil and Gas, Steel and Mining
- T&D Is A $100 Billion Industry with Strong Growth Dynamics in Emerging Economies and Electrification of Industrial Processes
Johannesburg, South Africa - 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 percent 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.
Building on their commitment to be closer to customers in Africa, GE (NYSE: GE) and XD Electric Group (SHA: 601179) today announced the formation of a new partnership that combines GE's intelligent controls with XD Electric's comprehensive portfolio of high-voltage equipment. Originally announced in May 2012, the partnership expands GE's capabilities as a leading provider of transmission and distribution (T&D) solutions and creates a new global competitor to provide utilities and energy-intensive industries with high-voltage (HV) solutions.
"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," said Amen Saeed, senior product manager for GE's Digital Energy Business (ME)/Luis Perez, general manager for EMEA, GE's Digital Energy business (Africa). "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 T&D solutions to meet growing demand for electricity in these emerging economies where demographic and urbanization trends are creating a need to build out the current grid infrastructure. Today, 3.5 billion people, 50 percent of the world's population, live in cities, and this number is expected to grow to 5 billion by 2030. This increase will require sustained electrical infrastructure investments to support water, power, energy and telecommunications systems. The rise in global electricity demand and population growth are economic drivers leading the expansion of the $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 HV transformers, circuit breakers, HV breakers, gas-insulated switchgear and other HV equipment to improve reliability. Together, GE's and XD's combined portfolios will provide utilities with the T&D solutions necessary to outpace these megatrends, increasing their electricity demand. GE and
XD also will provide energy-intensive industries with the HV solutions necessary to meet the rapid electrification of industrial processes.
The new partnership has three major components:
- A global partnership to combine GE's intelligent controls and service capabilities with XD Electric's comprehensive 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 localized intelligent controls and services.
- GE's 15 percent equity stake in XD Electric and a seat on XD's Board of Directors.
Modernization 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 modernization investments will grow by 10 percent 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," said Robert Turko, general manager, power delivery, at GE'S Digital Energy Business. "We are not only bringing increased technology capabilities to the region through holistic solutions to meet power needs from generation to consumption, but we also have a team of local experts on the ground focused on regional trends and partnering with customers from day one."
XD Electric is one of China's largest and preeminent primary equipment manufacturers dedicated to the research, application and development of high- and ultra-high-voltage transmission and distribution equipment. XD Electric's technology enables customers to transform and direct the flow of power for industrial, commercial and residential users.
GE is a global provider of grid modernization systems that enhance customers' power reliability and operating efficiency. GE's global reach, domain expertise and strong customer relationships in both utility and energy-intensive industries such as oil and gas, metals and mining will help the partnership broaden its customer footprint.
Citigroup acted as sole financial advisor to GE on this transaction. Weil, Gotshal & Manges LLP and Fangda Partners are GE's lead legal advisers.
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About China XD Electric Group
China XD Electric Group ("XD Electric") is one of China's largest manufacturers of electricity transmission and distribution equipment. The company specializes in manufacturing equipment for electrical transmission and distribution systems, such as high voltage substations, DC voltage lines, transformers, and gas-insulated switchgear. XD is the only company in China offering a broad range of primary equipment products. XD was founded in 1959, and has been listed on the Shanghai Stock Exchange since 2010 (SHA: 601179). Headquartered in Xi'an, China, XD Electric currently exports products to over 40 countries and regions throughout Europe, the United States, Asia and Africa.
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