I chose to interview Georges Bakaly Sembé for two reasons: (1)the topic of energy, especially green energy is very actual and (2)It is a field that is not often seen as a Congolese struggle. It is not part of the stereotype about the DRC and I wanted to challenge that.
Declaration of interest: Georges is a good friend and he has contracted me to conduct the Social Impact Assessment of one of his mining project in Katanga.
SAS: Hi Joe, can you tell us a little bit about yourself?
GBS: Hi Soraya, so my full name is Georges Bakaly Sembé, I am 34 and I am a founder of WESD CAPITAL LTD registered company that develops projects in the DRC. Our focus is mainly environment, energy and mining. I went to high school in South Africa, studied agricultural engineering at Texas A&M University and dropped out in my senior year, I went back to school a year later at University College London where I got an LLB. I worked for a year as a commodity trader specialized in carbon credits for an American company called CantorCO2. After the 2006 elections in the DRC, I decided to go home and be part of the new Congo, I got a job as an advisor to the Governor of Kinshasa (I was in charge of Energy and Environment) from March 2007 to early 2008 when I was named as the Director in charge of Project and Development for the Régie d’Assainissement et des Travaux Publique de Kinshasa (RATPK) which basically is in charge of waste management and public works in Kinshasa, I quit after a year to create my own company (WESD) and here I am.
SAS: I am writing on Energy and sustainable business. So you are in the energy business? Can you tell us about what you do?
GBS: Basically I stumbled onto the energy sector. My initial business was carbon credits but there is an obvious link between green house gas emissions, which is the core of the carbon market, and energy. Moreover, I became very intrigued by the fact that despite the fact that 81% of our energy comes from biomass (wood) and only 1% came from hydro, Congolese energy policy focuses on the later (the ministry of Energy in the DRC is called Ministry of Hydraulic Resources and Electricity. So each year a city like Kinshasa consumes 4.000.000m3 of wood but there is no policy in place to renew that resource so we are in essence depleting a resource that could easily be sustained. So our focus has been to find solutions that (a) look at alternatives sources of energy (landfill gas to energy, solar, geothermal, etc); (b) reduces the amount of wood consumed (improved cook stoves) and (c) energy efficiency by decreasing the amount of wood used to produce wood charcoal which is the primary fuel in the country (modern charcoal kilns that increase production efficiency by 350%).
SAS: Let’s focus on energy now. The DRC offers a great potential to produce energy, yet less than 15% of Congolese have access to electricity. What is the problem?
GBS: First let me correct you, only 9.9% of Congolese have access to electricity. Now onto the potential, there is a lot of hype about Grand Inga (GI) which could yield as much as 44GW, which is big but not close to solving Africa’s electricity problems as one often hears, Assuming it would function at 100% of capacity 365 days a year GI would yield 385,440 giga watt hour (GWH) today South Africa alone consumes around 214,000 GWH, you are in the US, America’s consumption in 2011 was 4,325,500 GWH for an installed electricity generation capacity of 1,012 GW so GI would be 4% of America’s installed capacity, and would produce if it were 100% efficient (which is physically impossible) 9% of US demand. The US has a population of around 317Million and Africa has more than a billion. If that comparison doesn’t work for you, let’s look at China which has a population of 1.3 billion and consumes 4,940,000 GWH/year, China is still a developing country.
SAS: Does it mean that the Grand Inga and Inga III are not good news for the DRC and Africa?
GBS: It is good news, but it is important to understand the limitations and challenges that we might face because we need to debunk the myth that GI is a silver bullet for the DRC or even Africa’s energy problems. The past tells its own story, Inga I and Inga II ruined the DRC before. They were “White Elephant” and I fear Inga III (recently signed with South Africa) and Grand Inga could be the same. Inga I and II installed capacity was 1775MW (1.775GW), half of Inga II so 700MW only worked for 5 years instead of the more than 50 that a hydro is meant to function.
The Inga-Shaba or Inga-Kolwezi power line as it is called today was meant to transport 1000MW to Katanga. It only ever transported about 260MW. This is a project which made up a third of the DRC’s sovereign debt. It basically never worked and only made power accessible to less than 10% of the population. One doesn’t need to be an expert to understand that this money could have been spent in a wiser way.
When it was built, the DRC contracted a debt of $12billion to build Inga III with South Africa and the copper industry in Katanga as the principal off-takers. Inga I and II were built for the copper industry hence the 1000MW power line, at the time it was the longest power line in the world stretching for 1,700km. War in Angola (copper was exported out of Angola) and the fall of copper prices coupled with the technical difficulties highlighted above meant the project could never pay for itself, hence a generation of Congolese ended up paying. Until we were given debt relief a couple of years ago we were still paying.
Today we want to do exactly the same thing and people are clapping, what will happen if tomorrow copper price plunge (as they did in the 2008 financial crisis) or if there is a war in Angola, where the same person has been in power for more than 3 decades? In this case the issue will not be an exit route for the copper since it is going out through South Africa, but the electricity itself. How would one maintain power lines in Angola meant to transport the electricity to South Africa via Namibia? Such governance issues are what has plagued the DRC for so long. Decision makers seem to think that it is easier to produce electricity and sale it to either the mining industry or export it, while energy is not a project in itself. It must be part of a bigger national project, so the DRC must ask itself what it wants to become and then develop its energy sector accordingly.
SAS: So how would you advise the government acts then? What are the alternatives?
GBS: The Government must look at all its options and stop acting as if Inga which is at the western end of the DRC can fuel the entire country; As we speak, we are using wood for 81% of our energy need in an arcane manner, in the US wood fuelled power plants produce 9% of consumed electricity, which is exactly what a 100% efficient GI would yield. The advantage of wood and other biomass are many, first there could be an entire industry to produce the fuel (process wood, replant wood, biomass residue which will be good for agriculture, etc), power lines would not need to stretch for ever as the plant can be placed anywhere and the wood can be planted anywhere in the country, last but not least we are already using that fuel albeit in an inefficient and unsustainable way.
Today the Government’s answer has been to liberalize the sector, while this is likely to attract investment I doubt that this, if the Government doesn’t develop a National Energy Policy, is going to help the average Congolese, most of the existing projects are looking at providing mining companies with energy (refurbishment of Koni, N’Seke and Mwadingusha in Southern Katanga, my own refurbishment of Manono in Northern Katanga, Nzoro and Budana in Province Orientale) or exporting it Inga to Brazzaville or Inga to Cabinda (Angola).
The Government must incentivize entrepreneur willing to produce clean renewable energy for the domestic market. Unless this happens I don’t see things changing for the better. An example is the liberalization of the mining sector, today we produce more minerals than in our entire history however if you take our main export (copper) Government revenues are less than 20% of what they were in the 1970s. Private investors are not going to take a risk on customers who are poor in such a high risk environment unless the price of electricity is so high that they can’t afford to miss the opportunity. however that would mean that the average Congolese would not be able to afford it.
SAS: Talking about affordability, how do you, through WESD CAPITAL, help Congolese consumers access energy?
GBS: On a domestic level we are trying to increase energy efficiency with things like improved cook stoves (ICS) which by the save lives. Fumes from traditional stoves kill more than 2million people a year globally; it is the 4th cause of mortality in the world. In the DRC alone, 80,000 people die each year from diseases that could be prevented through the use of an ICS. Along with another Congolese entrepreneur, we are offering affordable solar solutions. We also have a landfill gas to energy project in a poor neighborhood of Kinshasa, where we are currently flaring biogas (with a 55% methane content) that can be used to produce electricity. This electricity would be affordable because (a) we get carbon credits (though prices are at an historical low) and (b) the European Union funds the landfill. Finally we have done feasibility studies with French consulting firm Ingerop on two hydro power plants one in Northern Katanga M’Piana Mwanga 48MW and another in Mbuji Mayi (Kasai Oriental) Lubilanji I 12 MW. We are now seeking funding for both. Last but not least we are in discussions with Bandundu and Equateur province in order to have a pilot project with a small wood powered generator.
SAS: This is not an easy task, and I can understand why there are not many Congolese embarked in this journey. What are the challenges you face?
GBS: Most of the challenges are manageable, I mean this is the life we chose the hardest thing is to find capital, either as seed capital (we fund all our initial studies ourselves) or as capex and opex. Simply because there are no financial markets in the DRC so equity funding is difficult, and looking at debt interest are high (typically 15-18%), tenure are short (maximum 6 years) in this sector you need more time.
SAS: What are your long term goals in the energy sector? And how can you encourage people to invest more in such a difficult environment?
GBS: In the long term I hope to create the leading renewable energy company in Africa, focusing on wood and biomass residue as a primary fuel, but also looking at geothermal gas, biogas, wind, solar and hydro. I am confident that that this would be a success because of my proven expertise and in dept knowledge of the sector, acquired through direct contact with consumers, Congolese who buy my ICS or photovoltaic panels, and talking with my father and his colleagues who worked for the SNEL the electricity company for more than 18 years.
Contrary to popular belief, the Congolese domestic energy market is lucrative, today most people in urban areas have a diesel generator, the wood charcoal market in Kinshasa is worth close to half a billion dollar a year, so there is money to be made. I would encourage my fellow Congolese businessmen and foreign investors to explore and invest in this sector.
No comments:
Post a Comment