TUNIS/DOUALA (CI Africa) — Caterpillar Inc (NYSE: CAT) power generation Riazzino, Switzerland-based Turbomach unit and Devon, UK-based Centrax are potentiakl takeover targets for Columbus, Indiana-based Cummins, Inc (NYSE: CMI) and privately-held Toyko-based Yazaki Group, company sources said.

[Caterpillar General Manager for Africa and Middle East David Picard speaks to Capitol Intelligence/CI Africa using CI Glass at Corporate Council on Africa U.S.-Africa Business Summit in Washington, DC. June 14, 2017]

Yazaki and Cummins executives separately told Capitol Intelligence that they are seeking to increase their African footprint by acquiring companies in the micro grid and 5 MW to 10 MW energy co-generation space.

Neijb Boujnah, a power engineering consultant and owner of Partners, said that producing power with natural gas is six times cheaper than other means in Tunisia/Africa and that use of co-generation plants could increase efficiency and lower CO2 emissions by 30% to 40%.

ANME, the oversight group, is the middle of an ongoing debate whether it is better for African SMEs to use refurbished turbines at a lower cost or purchase new turbines.

There are currently only two suppliers of this type of small Turbine on the market: The UK-based Centrax uses Aero derivative technology developed by Rolls Royce and turbine engines built by Munich-based Siemens AG.

[Siemens AG chief executive Joe Kaeser speaks to Capitol Intelligence/CI Africa using CI Glass at Export-Import Bank Annual Conference in Washington, DC. April 23, 2015]

“A 5 megawatt plant costs a total of TND 8.5m if done with new turbines and TND 6m if they use refurbished turbines,” he said, adding. “It is only 20 percent price difference and of course it would be better to use new turbines if possible.”

Algeria electricity supplies are 50 percent less efficient than Tunisia while Libya electrical supply is going through a huge overhaul at the moment and may take years to create a stable and functioning energy industry.

Also speaking with Capitol Intelligence during an Ambrosetti Workshop conference in Cernobbio, GE Italy CEO Sandro M. De Poli said the company’s new 10 megawatt J920 gas co-generation power plant  would be perfect for the North African markets of Tunisia, Libya and Algeria.

[Former GE Power President and CEO (now Blackstone) Steve Bolze speaks to Capitol Intelligence/CI Africa using CI Glass on Africa at Bipartisan Policy Center in Washington, DC. May 15, 2017]

The World Bank, European Bank of Reconstruction and Development (EBRD), International Finance Corporation (IFC), the Washington, DC-based Overseas Private Investment Corporation (OPIC) and the new Abdijan, Cote D’Ivoire-based African Development Bank are all interested in providing project finance and political risk guarantees for companies building out new co-generation electrical power in North Africa and Africa.

By PK Semler in Tunis and Douala, Cameroon. For more information please call 202-549-3399 or email: pks@capitolintelgroup.com