Exclusive interview with Dr Reuel Khoza, Chairman of the Globeleq Board – diamond sponsor at iPAD Cameroon Energy & Infrastructure Forum in Yaoundé in December.
- Let’s start with the most exciting projects that Globeleq is involved in at the moment?
I sincerely believe that everything we do is exciting because every one of our assets or projects provides essential electricity and significantly contributes to the economic and social development of that country.
Globeleq currently has around 1,300 MW in operation in Cameroon, Côte d’Ivoire , South Africa, Tanzania and Kenya. The company plans to develop and contribute a further 5,000 MW to the region over the next 10 years. In Cameroon, we are in the final stages of developing a project to expand the existing Kribi gas fired plant from 216 MW to 330 MW. In Ghana we are developing a 450 MW gas-fired project and in South Africa we are continuing to build on our renewable energy platform.
- What makes Globeleq stand out from its competitors?
Globeleq has been involved in developing and operating independent power projects in emerging markets since 2002, so it is one of the most experienced companies in the African IPP sector.
Our professional team of developers has a strong track record in the development of solid, liquid and gas fired thermal plants and renewable power, including hydro electric generation. Our experience spans an array of technologies and geographic locations that provides Globeleq with a unique perspective and strong foundation to develop appropriate solutions in bringing new capacity to Africa. With committed shareholders, (the UK’s CDC Group and Norwegian Norfund), providing access to funds for new investments, the company continues to be uniquely positioned for further growth and investment in the power sectors of Africa.
- Please tell us more about your business interests in Africa? And specifically in Cameroon?
Globeleq is active across all of Africa. The assets include:
Tanzania: Songas Ubungo 190 MW gas fired power plant and associated gas processing and pipeline infrastructure
- South Africa
- 138 MW Jeffreys Bay Wind Farm
- 50 MW Droogfontein Solar Power (PV) plant
- 50 MW De Aar Solar Power (PV) plant
- Côte d’Ivoire: Azito 430 MW gas fired power plant
- Kenya: Tsavo 75 MW HFO fired power plant
- 216 MW Kribi gas fired power plant with a further 125 MW expansion project in final stage development
- 88 MW Dibamba HFO fired power plant
- What in your view are the main challenges to the power sector in Cameroon?
The following are key areas which need to be addressed to continue sector growth:
- The ability to add more capacity to meet the growing demand. According to Eneo, Cameroon’s integrated utility, there are 100,000 new connections to the grid every year and the demand growth rate is beyond 8% pa.
- There is an overreliance on subsidies meaning that tariffs do not reflect the costs to maintain and supply electricity, thereby creating a shortfall in revenue which should be used to build, upgrade and maintain crucial infrastructure.
- The need for creditworthy major institutional customers.
- Since the 1990s, Cameroon has historically been one of the most politically stable countries in West Central Africa, offering a sound investment environment with steady economic growth. However, its economic potential, particularly in natural resources, continues to be constrained by unreliable infrastructure, insufficient distribution networks and a difficult business environment.
- Hydro has been the main focus for many years leading to seasonal power shortages and a need for more thermal generation to balance the system – Globeleq’s expansion of the gas fired power plant at Kribi will help to address that need.
- There are well documented difficulties in accessing the available gas at market prices, and in gas developers being able to make the abundant gas reserves available to power producers and other consumers.
- The Government signs many speculative MOUs – particularly with inexperienced IPP developers. This unfortunately leads to an artificial impression that there are many projects being developed when in reality there are only a few viable projects which will become commercial.
- There is a need for more uniform government and/or parastatal accountability to enable rules/regulations to be enforced and commercially expedient decisions made
- Challenges mean opportunities. What are the opportunities for prospective investors?
Cameroon is a stable country with many investment opportunities. Here are a few key ones:
- - It offers experienced investors a growing economy with strong fundamentals, and a strong institutional framework in which do to business, provided they can navigate the specifics of the market and business environment
- - In the energy and infrastructure sectors there is strong demand for power generation, electricity transmission and distribution and transportation infrastructure
- - Political stability enables the protection of both domestic and foreign investments
- - A well educated and mostly bi-lingual work force.
- What is your vision for the industry?
To achieve a diverse mix of energy generation in which uninterrupted electricity supply becomes the norm and universal access to electricity in all urban areas is achieved:
- - By remedying sector issues
- Governance improvements across all sectors; implementing sound energy policies
- - Transparent and higher standard of managing resources and revenues, and in awarding projects.
- Why did you decide to partner with iPAD Cameroon?
Over the years, Globeleq has participated in many of the iPAD events held throughout the continent so we are aware of the calibre of the delegates, speakers and conference agenda. The energy sector in Cameroon is a growth sector and we already have two significant investments (Kribi and Dibamba) providing the country with reliable electricity. At Kribi, we are in the advanced stages of developing an expansion to the plant, taking the total capacity from 216 MW to 330MW. Participating in the iPAD Cameroon event provides us with an opportunity to showcase our capabilities as the most experienced independent power producer in sub-Saharan Africa.
- What will be your message at the event?
Globeleq is an experienced developer, owner and operator of independent power projects in Africa. Since the company was founded in 2002, it has participated in nearly 14,000 MW of generating capacity in 27 countries worldwide, investing more than US$1.3 billion of equity across 44 different power projects. Our Kribi Expansion project is ready for financial closing so we would like to see the Government expedite the process so we can move into the construction phase and deliver more essential and affordable energy to the country.
Supported by its shareholders, CDC Group plc and Norfund, the development finance institutions of the UK and Norway, Globeleq continues to grow its business by investing capital to enhance performance of its existing assets and develop new utility scale power generation in African countries. Globeleq currently owns, operates and has investments in 1,300 MWs of capacity in Africa and plans to develop and contribute 5,000 MW to the region in the next 10 years. The company’s current operating assets span an array of technologies, including gas, wind, solar and HFO generation. Previous operational experience also includes hydro electric generation and other liquid and solid thermal fuels.
Biography: Dr Reuel Khoza is also Chairman of Aka Capital (Pty)Ltd, an investment holding and private equity company; a former chairman of the Nedbank Group, Glaxo SmithKline SA, Corobrik (Pty) Ltd, and Eskom Holdings Ltd (The South African Power Utility: 1997-2005). Dr Khoza is currently a director of Nampak Ltd and Sasol Oil. Dr Khoza is also President and Fellow of the Institute of Directors SA and Charter Director (CD SA); an author of several books on business leadership and corporate governance.