Siyabonga Mbanjwa – Regional Managing Director, SENER Southern Africa
Siyabonga Mbanjwa, regional managing director of SENER Southern Africa, discusses the challenges of setting-up the local affiliate and the opportunities that exist in the region, especially within the gas and renewable sectors. Moreover, he highlights the technology SENER brings to the market and what sets them apart from other EPC players.
How have been the first years since establishing SENER offices in South Africa, and what was the rationale behind this decision?
“Our strategy moving forward is to keep close to gas companies that are already present there and to offer them value in their operations. In other targeted Southern African countries, such as Namibia and Botswana, we see a lot of solar energy potential due to some of the highest DNI levels in the world being present in this region. “
The main objective in the beginning was to establish the brand of SENER in South Africa and let the market know that we are here. We understand the best way to build the brand name is to execute projects well. A major part of this was to see which opportunities fit into what the company does best globally and bring this approach to the region.
At that time also, in 2015, the renewable energy program was underway, and the company was in a great position to take advantage of this through its world leading concentrated solar power (CSP) technology. This has allowed us to complete various projects, including the Bokpoort CSP plant amongst others. Furthermore, to cement the company´s footprint, we are engaging with key stakeholders and associations, and trying to lead the market.
What has been the largest challenge you have experienced thus far?
Working for a traditional Spanish company in South Africa brings its own challenges, as we must portray ourselves as a South African player that is looking to be a valuable contributor to the local environment, which is very important here. If you look at the governmental level, they have been pushing the idea of radical economic transformation so that the economy has a positive impact on a larger percentage of the population, rather than in the past where only a small minority benefited.
For SENER, it is a balancing act to be viewed as South African, while attracting foreign direct investment to add value to the economy through jobs etc. To do this, we are hiring locals, paying local tax and promoting skills transfer from our offices around the world to the African ecosystem.
How important are foreign companies to the development of the region?
There is a perception that foreign companies are entering the market and taking jobs away from locals. Our view at SENER is that you need, and can be more beneficial for both sides, a good mix between international and local companies for adequate skills transfer to take place.
In fact, if you listen to President Ramaphosa, an astute business man, he talks about plans to attract at least 100 billion USD in investment into South Africa through foreign investors over the next five years. This is critical to further stimulate the South African economy and create sustainable jobs.
What are the fundamentals of the Kathu Solar Park project?
On completion it will generate 100 megawatts from CSP utilizing parabolic trough technology, which is an alternative to tower technology. All this is done using a SENER owned patented innovation called SENERtrough® parabolic trough collectors and the thermal storage system using molten salts. We are responsible for 100 percent of the engineering and 50 percent of the EPC work. This project is managed by an Engie led consortium that encompasses a number of local shareholders. The EPC contractor has in turn appointed a number of suppliers and sub-contractors to execute various work packages. This involves maximizing on local companies and products, backing our need to facilitate the local industry and create an ecosystem for the future.
Is interacting with the local environment your biggest challenge?
It is one of our challenges. As an example, Kathu is a mining town and over the years mining has been the largest employer in the area. With commodity prices taking a dip in the past few years, this had a negative impact on employment in the area. When construction started at the Kathu Solar Park project, expectations were extremely high for it create a significant amount of employment opportunities. We have been able to create no less than 1500 work opportunities during the construction phase of the project; however, the area has a much larger population that is actively looking for new job opportunities.
Throughout the journey in the region it has been to understand the local context, which entails involving local people and companies in the economic opportunities that have been created by SENER coming into the market. There is also a community development aspect, because we recognize that it not all about the bottom line.
What is the scope of the company´s footprint throughout the region?
South Africa is our base, but Southern Africa is our focus. If you look at the region there are a lot of similarities, such as the legal and financial systems used. This makes it easier for us to enter and operate in these markets. . Our aim is to target the region and we see great potential in Namibia, Botswana, Mozambique. and Mauritius.
Where do you see the greatest potential in the future?
We must look for work in areas where there is a fit between the opportunities available and our core areas of focus. At this stage, we are focusing on renewables and gas. Mozambique is, therefore, a great market as there are large gas reserves that have not been fully tapped into even though they have attracted large gas players thus far. Our strategy moving forward is to keep close to gas companies that are already present there and to offer them value in their operations. In other targeted Southern African countries, such as Namibia and Botswana, we see a lot of solar energy potential due to some of the highest DNI levels in the world being present in this region.
What is your mid-term objective in regard to gas and renewable ratio of your business?
We want a gas to renewable ratio in our operations to be a fifty-fifty split. South Africa’s recently appointed Minister of Energy, Jeff Radebe, has been very active in speaking about how crucial renewables are for South Africa in the future. If you look at the balance of the system, CSP can generate continuous and excellent supply of electricity even when the sun has set. Some commentators have expressed concerns about renewables not been adequate on their own, and this is where gas comes in. Gas is vital for the future energy mix, not only for South Africa, but for the entire region. Our projections are that South Africa’s Liquified Natural Gas IPP (Independent Power Producers) Procurement Program will come to fruition in the next three to five years.
The EPC market in South Africa is quite mature. What differentiates SENER from the competition?
Typically, the South African engineering and construction sector is still focused on the traditional way of executing projects. That means that there is a clear separation of design from construction. This involves the client choosing one firm to advise them and develop the design, whilst another firm takes up responsibility for construction. With a turnkey model of project delivery (engineering procurement & construct), one company can take up all the responsibility for executing not only design but also procurement and construction.
SENER is able to offer this integral turnkey service by executing the entire project on a client’s behalf. There aren’t a lot of players in the market that can offer such services in CSP, gas and other technologies that SENER specializes in. Furthermore, SENER global entails vast international experience along each step of the value chain, while offering our own technology along each level.
What will make the difference between success and failure as you move towards your goals?
If you sit back and expect projects to come to you, nothing will happen. You must be pro-active in dealing with key stakeholders and offering solutions to clients, whilst ensuring that projects are completed on time, within budget, within agreed quality parameters, safety and exceed agreed performance standards.
Whether we are ultimately successful, depends on execution, and this is where your reputation comes from. This is the key tool for us moving forward and will determine if we are taken seriously in the region or not.
Where do you want to take SENER Southern Africa in the next six years?
Firstly, the aforementioned fifty-fifty split between gas and renewables. Additionally, we should be focusing on growing our oil and gas footprint as we offer to this sector the full bevy of services, as well as growing our impact in infrastructure and transport services. This will consolidate our market position and give us a good, diverse mix of work.