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.
Africa Energy and Infrastructure Investment Forum – Speaker Profile
Vivek Dharni,
Principal – Private Equity & Principal Finance, Mota-Engil
Vivek leads fund raising and capital structuring for Mota-Engil (Africa) for projects under development as Principal – Private Equity and Debt Finance.
Vivek has more than 15 years of professional experience. He has extensive experience in the financial services sector and the corporate sector having worked in various position in Corporate/ Project Debt as well as Private Equity space. He brings experience across the developed, developing and frontier markets having worked in Africa, Middle East, South Asia and South East Asia. He specialises in the acquisition and due-diligence process of asset portfolio across Infrastructure and Real Estate domains.
Vivek joined Mota-Engil in early 2015 as a key member of the team driving the company’s strategic vision of becoming a provider of infrastructure solutions across the African continent. He has been instrumental in identification and development of various infrastructure projects in the continent. The current projects under development include an airport, inland logistics hub, road projects, railway concessions and energy projects.
His experience across multiple markets provides him with an innovative and pragmatic approach to engineering financial solutions.
Vivek holds an MBA in from IE Business School, Spain and graduated from Mumbai University, India
To register for the Africa Energy and Infrastructure Investment Forum click here