AEIIF interviews: 60 seconds with Vivek Dharni, Mota-Engil

In the lead-up to the Africa Energy and Infrastructure Investment Forum, we spoke to some of the key market participants who will also be on stage as panelists in London.

This Interview Series, gets to grips with what is front of mind for many developers and financiers as the African energy and infrastructure landscape evolves. Our speaker, Vivek Dharni, Principal – Private Equity & Principal Finance at Mota-Engil, shared his insights on some of the key challenges and opportunities.

What is the primary challenge that you are currently facing in the market, and how are you adapting to this?

The primary challenge that most developers face is the extended time line of the development process for any infrastructure project in the continent. The extended timeline not only requires longer term financial commitment but also elevates the inherent risks in the process and increases costs. The extended time line is caused by multiple factors – these include lack of available quality information, lack of alignment between expectations of international financiers and local regulations and the lack of credible bankable counterparties, further worsened by lack of comprehensive regulatory regimes in many countries in the continent. An example of a factor causing delay is the lack of alignment of Environment and Social Impact assessment laws as per local legislation and IFC standards/Equator Principles which are prescribed by most international financial institutions.

As a professional who has worked across developed, developing and frontier markets, in my view the key to success is to partner with institutions with long standing presence in the market and to incorporate teams of specialists focusing on navigating each part of the development life-cycle efficiently.  As a team our focus remains on compressing the timeline through parallel development work streams forming a condensed development process.

If you had a magic wand that could do anything for the industry, what would you wish for?

During the course of my career, I have engaged in differing roles in the infrastructure eco-system. In my current role, I often see myself as a development fund with proprietary funds financing development of green-field infrastructure projects. We also play the role of a developer, an engineer, an advisor, a consultant and an EPC contractor. As a developer, I wish that governments would develop a sound incentive structure for developers to propose meaningful viable projects to the government. At the same time, as an EPC contractor, I wish that banks and financial institutions would be more amiable to single sourcing processes. But the most important issue hampering development of infrastructure in the continent is the lack of accessible development financing/grants. If I had a magic wand, as a financier, I would create more avenues for accessing development financing and an easier process for accessing the same.

Which country in sub-Saharan Africa excites you the most in terms of its energy/infrastructure potential, and why?

There is tremendous potential for the growth of energy and infrastructure across the continent. The same is driven by a low current development level across the infrastructure space and a demographic evolution which will change the face of the continent in the years to come. On the basis of my experience of local factors and review of foreign institutional interest, I see a huge potential in renewable projects including solar and hydro projects. I would like the demand for these projects to be driven by a viable local consumer market and/or corporate clients – I especially like markets like Kenya and Nigeria in this regard. There is also interest in various other countries across southern Africa including Zimbabwe, Uganda and Mozambique.

If you could give one piece of advice to governments across the region who are looking to grow their country’s energy footprint, what would it be?

Firstly, I would advise the governments to assess the local energy demand and in light of the same review, the need for investment into energy projects. Equally important for the governments is to institute a regulatory and institutional framework providing sufficient comfort to an external investor. Further, in view of the number of projects currently being assessed, I would advise the governments to prioritise projects on the basis of time to market and expense.