Exclusive interview with Matteo Brambilla, director Building Energy, platinum sponsor at the upcoming African Utility Week and Clean Power Africa in Cape Town in May.
1. Tell us more about the background and history of Building Energy?
Building Energy is an independent power producer (IPP) which operates in Italy and abroad, producing energy from renewable sources. The company has developed a strong international presence by expanding into international markets where renewable energy sources offer the greatest potential.
The company was established in 2010 by its current management team in partnership with Siron group, a distributor of oil products. The managers have many years of experience with major multinationals in the energy and real estate sectors, where they have been responsible for planning and developing projects on a global scale.
Since its foundation, Building Energy has achieved an impressive track record:
• 150 MW photovoltaic systems produced directly or indirectly in Italy;
• 81 MW photovoltaic systems currently under construction in South Africa;
• Development pipeline for a total of approximately 1000 MW from photovoltaic, mini- hydroelectric, wind, and biomass technology in Italy, South Africa, the United States, Serbia, Japan, the United Arab Emirates and Panama.
To date the group has 70 employees located in the headquarter in Milan and the international offices in South Africa, the United States, Serbia, Japan, the United Arab Emirates and Panama.
2. What makes your products and services competitive?
Building Energy has developed its own distinctive business model which consists of managing every step of its projects directly, covering the entire life-cycle of its renewable power systems and installations. This model combines the technical engineering skills necessary for planning and commissioning a project, the financial know-how required to put the financial structure into place and the managerial skills required to guide the entire development process.
Moreover, Building Energy’s top management has in-depth knowledge of the industry, industrial operators, and financial backers interested in investing in these types of projects, such as funds specific to the energy sector, private equity investors, and international banks. This allows the group to efficiently manage definition of a project’s financial structure as financial sponsor.
Building Energy’s international expansion also takes advantage of strategic partnerships with leading local operators in the target markets. In South Africa, a joint venture was signed with WBHO, one of the country’s major general contractors, which has revenue of over 1.4 billion euro. Also in the United States the company operates with a local partner, ABM group, listed in New York Stock Exchange (ABM) and considered among the main suppliers of services and integrated solutions.
Alongside its industrial partnerships, Building Energy has also developed constructive relationships with local and national authorities involved in socio-economic planning, in order to maximize the participation of government institutions, the efficiency of its projects, and the beneficial impact of the stimulus in the local area. For example, the Mkuze project in South Africa, will be developed in partnership with Charl Senekal Trust (CST), South Africa’s main sugar producer: the plant will be fueled by the combustion of sugar cane tops, with 550,000 tons of finished product from a plantation of 5,000 hectares.
3. Please give us a summary of where your interests around the world are?
Building Energy operates in Italy, Eastern Europe, Africa, the United States, Japan, the United Arab Emirates and Central America.
4. Which countries in Africa are you active in?
Building Energy is present in Africa through its office in Cape Town, which managed and coordinated the development and realization of more than 30 projects in South Africa and in the following countries in central Africa: Namibia, Botswana, Zambia, Uganda, Kenya and Lesotho. The two main projects in the African continent are in Kathu and Mkuze, in South Africa. Based on the expertise and knowledge of the South African market acquired over the course of these major projects, Building Energy intends to take on more opportunities emerging in South Africa and its neighbouring countries.
5. Can you give us an outline of the projects in Africa?
Kathu, South Africa
In December 2011, Building Energy won the contract for the construction and installation of an 81 MW photovoltaic project in Kathu in the Northern Cape. It is now the biggest solar park on the continent. In November 2012, Building Energy signed an implementation agreement with the South African Department of Energy and a project financing agreement with the Rand Merchant Bank for the amount of almost 280 million euro. In a joint venture with its local partner WBHO, Building Energy is also responsible for construction of the installation – which has been operating since August 2014 – and its subsequent management for a period of 20 years.
Mkuze, South Africa
In October 2013 Navosync (Pty) Ltd, a fully owned subsidiary of Building Energy Spa, was awarded the commission for the construction – in the area of Mkuze, Kwala Zulu Province – of a biomass plant with a capacity of 15 MW, the first and largest biomass plant in Africa. It is the first biomass power station selected by the South African government among over 90 candidate projects by international players, as part of the third round of an incentive program of energy production from renewable resources.
According to the project, presented by Building Energy in partnership with Charl Senekal Trust (CST), South Africa’s main sugar producer, the plant will be fueled by the combustion of sugar cane tops, with 550,000 tons of finished product from a plantation of 5,000 hectares.
Building Energy will be a shareholder of this project, with a number of local investors including CSST, H1 Holdings, and Mkuze Local Community Trust, whereas Rand Merchant Bank will be the Mandate Lead Arranger for the Project Finance of around 1 Billion Rand (about 72 million euro).
Construction is scheduled to begin in February 2015 and will involve around 250 local technicians, whereas 200 more will work in the departments connected to the plant after the activation, expected at the beginning of 2017.
In December 2014 Building Energy, in partnership with Simba Telecom, announced the construction of a 10MW photovoltaic plant in Tororo, in eastern Uganda. The project will be financed thanks to the Get Fit program, promoted by the Government of Uganda through KFW, an institution aiming at helping African countries to grow and fight poverty by supporting renewable energy projects. The plant is expected to generate 17GW every year, in order to satisfy the energy needs of 2500 families.
6. What are the main challenges for you as a company in the energy industry in Africa?
The main challenge is the bankability of projects. In Africa there surely are a lot of opportunities across the whole renewable energy spectrum. Some countries also have a track record and an efficient banking system, like South Africa, but most of the countries have non bankable off takers or PPA structures which makes it very difficult to close projects in a reasonable time.
7. What surprises you about this sector?
The fast growing industry and the number of opportunities that are flourishing in the whole Sub Saharan Africa. Literally week in week out we see new programs and tenders coming out.
8. Why did you decide to partner with African Utility Week?
Considering the strong presence Building Energy has in the African energy market, we believe that the African Utility Week might be a great opportunity for the company to strengthen its network of business partners and widen it with new contacts of companies and institutions working in the utility, and especially power, field. Moreover, we think that this event will also allow Building Energy to increase its visibility in this sector, thus helping the company to expand its business in the continent.
9. What will be your message at the event?
Africa has the resources and power needs to demonstrate that renewable energy doesn’t need to be subsidized anymore.