We describe the first heuristic algorithm that selects the locations and service areas of transformers without requiring candidate solutions and simultaneously builds two-level grid network in a green-field setting. The algorithm we propose minimizes overall cost of infrastructure costs: specifically the combined costs of transformers and the two-tiered network together by solving transformer location problem as well as network design problems in a single optimization framework. In addition, it allows one to specify different costs for the higher throughput lines upstream of the transformer as compared to downstream of the transformer. Simulations are carried out based on real-world spatial distributions of demand points from rural locations in Africa, specifically in places without any pre-existing infrastructure to test the algorithm and generalize the results. (C) 2012 Elsevier Ltd. All rights reserved.