VEOLIA AND THE ENERGY SECTOR IN AFRICA

Transcription

1 VEOLIA AND THE ENERGY SECTOR IN AFRICA Energy is a crucial issue for ensuring the growth of Africa. A new momentum of the sector is gradually taking place. New initiatives, if accompanied by governmental reforms, could boost the economy of African countries by more than 30% by These initiatives undoubtedly need a better management of resources and the promotion of renewable energies. Veolia, the first private energy distributor in Africa 2, has more than ever a role in developing the continent s access to energy. 1 World Energy Outlook, OEDC/IAE, «Electricity» activities in Morocco and Gabon represent a total of 1,365,000 customers and distributed 5,500 GWh

2 2 VEOLIA AND ENERGY IN AFRICA PATRICE FONLLADOSA, PRESIDENT AND CEO, AFRICA & MIDDLE EAST «Since 2002, we have been tackling one of the biggest challenges of Africa, namely access to the energy resource. By , the energy demand in the continent will be four times higher than in Veolia, as a leading global resource management provider, brings new models based on the performance and optimization of energy efficiency in a move that is meaningful to our customers.» SOCIAL AND ECONOMIC IMPACTS Through our significant activities in Africa in the field of energy, we have 4 : enhanced the efficiency and reduce the environmental impact of the facilities that we manage thanks to our global and local expertise of operator in the generation, transmission and distribution of electricity. given access to energy to more than 1,300,000 people in Africa in generated 651 million in 2014 (60% of the turnover managed by Veolia Africa Middle East zone) from electricity services provided to our customers. gained access to markets that are new to Veolia, including in Guinea Conakry through a performance contract signed in June contributed to the modernization of the sector through the adoption of new contractual schemes adapted to the African market. accelerated the transfer of skills through the management of 4,500 people dedicated to the electricity sector, including in Gabon and Morocco. 3 Brigther Africa, MacKinsey&Company, February Veolia Africa Middle East Impact Report

3 3 VEOLIA AND ENERGY IN AFRICA INDICATORS Gabon, SEEG - Société d Energie et d Eau du Gabon Installed Power = 438 MW 268 Thermal Hydraulic 170 Clients = 280, ,097 non subsidized connections subsidized connections 54,305 MV 1,237 Produced Electricity* (in GWh) 2, Length of Networks = 4,746 km 4,040 Distribution * Including purchases ,075 2,420 transformer stations Transportation 706 Sold Electricity (in GWh) 51 1, ,645 Municipalities are served

4 4 VEOLIA AND ENERGY IN AFRICA INDICATORS Morocco, Redal & Amendis Installed Power = 1,213 mw Rabat 673 Tangier 320 Tetouan 220 Clients = 1,084,564 Rabat 583,002 Tangier 286,109 Tetouan 215,453 Length of Networks = 12,158 km Rabat 673 Transformer stations 6,204 Rabat 3,473 Tangier 320 Tetouan 220 Tangier 1,943 Tetouan 788 Sold Electricity 3,723 (in GWh) Rabat 1,997 Tangier 1,199 Tetouan 527 Municipalities served Rabat : Wilaya Rabat Salé, La commune urbaine de Bouznika, la commune rurale de Cherrat Tangier : 7 Communities Tetouan : 5 Urban Communities 7 Rural Communitites

5 5 WHY IS IT A DEVELOPMENT STRATEGIC AXIS FOR VEOLIA? WHY IS IT A STRATEGIC AXIS OF DEVELOPMENT FOR VEOLIA? A STRONG MOMENTUM FOR CHANGE Africa is an emerging continent with an unabated growth Experts foresee a growth of African GDP equal to 4.5% in 2015 and 5% in 2016, after a more moderate growth of 3.5% in 2013 and 3.9% in Growth in 2014 has suffered an adverse international situation and domestic problems of various kinds in a number of African countries, but world economy improves and effective 2016, Africa should witness before-crisis 5 growth levels, even if the situation varies a lot from one country to another. Africa has a significant market potential for consumption and services «This wide market where the population will double by 2050 has a very good potential. In addition to its growth rate, it features an emerging middle class, a young population, an urban sprawl and an appetite for new technologies» 6. Industrials of mining, petroleum and agri-food sectors have already invested and will keep investing significantly in Africa. They need water and energy in a continent where resources are often rare and where environmental requirements are becoming more stringent. For electricity, they are a client and potentially a local provider. Electricity is sine qua non for the development of the African continent Today, more than 600 million Africans or 70% of the population of the continent do not have access to electricity. General access to electricity is indeed a key factor of economic growth, job creation and social inclusion in developing countries and especially in Africa. 7 This is why many personalities from the political world and civil society are committed to make this access widespread in Africa, alongside international institutions and donors. Future of electricity in Africa through renewable energy and decentralization Until recently, the development of electricity in Africa followed the model of developed countries, with (thermal and hydraulic) power generation plants and a distribution network (transport networks, transformers etc). More and more, renewable energy 8 is implemented in addition to hydraulic energy as in smaller and decentralized distribution systems. For electricity, as for other services, e.g. the phone, it is very likely that Africa will not follow a linear development model, especially since renewable energy and decentralized models are supported by many organizations as well as public and private funders. 5 African Economic Outlook 2015, Regional Development and Spatial Inclusion, Investir Le journal des finances, June 27; 2015, The African Continent, a new border for French companies (Le continent Africain, nouvelle frontière des entreprises françaises.) 7 Energy, People and Planet. Seize energy and climate opportunities in Africa, Africa Progress Panel, 2015 report 8 UN Initiative «Sustainable energy for all» launched in World Bank Strategy, Strategic Orientation Document, July 2013.

6 6 WHY IS IT A DEVELOPMENT STRATEGIC AXIS FOR VEOLIA? ELECTRICAL SERVICE VALUE CHAIN It breaks down into several stages, including Design- Construction/ Production/ Transmission/ Storage/ Distribution/ Marketing. This value chain somewhat changes when we speak about renewable energy, coupled or not with a classical distribution network: Production means are different and often of lower unit capacity, except in the case of hydraulic energy and include solar (photovoltaic cells, parabolic mirrors, thermal solar...), wind, hydraulic, biomass, (solid recovered fuels). Storage may be included in case of intermittent energy sources (solar, wind), which then has a significant share in the cost of assets. There may be an interest in directly connecting the production of renewable energy to a system that consumes energy to improve performance, (e.g.thermal desalination and thermal solar panels). IN AFRICA, WATER AND ELECTRICITY SERVICES ARE OFTEN INTIMATELY LINKED Water and energy are basic human needs and for the majority, Africans lack one as the other. It is therefore quite natural that access to these resources develops simultaneously and that the management is entrusted to the same operator. This is the case for Veolia in Gabon and in Morocco with Redal & Amendis. Companies managing water services in Africa are often also managing the electricity ones. This irruption of renewable energy in the landscape of the electrification of Africa will change the positions acquired in the European markets, the competitive advantage being given, less by the ability to operate conventional energy production and distribution systems than by the ability to assemble (local, global) scaling solutions, (classic, renewable) technologies and different economic models, subject to the clients needs. In this configuration Veolia has the ambition to contribute to these developments.

7 7 WHAT ARE OUR COMPETITIVE ADVANTAGES? WHAT ARE OUR COMPETITIVE ADVANTAGES? VEOLIA EXPERTISE AT THE SERVICE OF AFRICANS We operate many electrical networks in Africa (2 in Morocco, 49 in Gabon) and ensure the production of electrical energy in Gabon. We are therefore experienced in electrical distribution, as well as in operating production plants (thermal and hydroelectric power plants). We also operate in Germany the Brauschweig electrical distribution network. Veolia manages many contracts of production and distribution of heat and cold in Asia, England, the Netherlands and Central Europe, France and of course in the Middle East, including «Saadiyat Island» near Abu Dhabi and «Bahrain Bay» in Bahrain. Our teams operate many cogeneration and a few tri-generations for the account of communities and industrials. We finally have a very good experience in the methanisation of solid and liquid waste and incineration of waste as well as the correlative generation of electricity. With Africa seeming to turn resolutely to renewable energy, our expertise in operating biomass plants is a definite asset. We also have a small-scale experience in implementing and operating photovoltaic solar power plants to supply an installation or a group of installations. In Niger, one of our agencies is fully powered by solar electric power. Finally, Seureca, a subsidiary of Veolia Group specialized in consulting engineering, works with a network of international experts and has set up several years ago, a department dedicated to energy and electricity in particular. a

8 8 WHAT ARE OUR COMPETITIVE ADVANTAGES? OUR ACTIVITY BOTH IN WATER AND ELECTRICITY SERVICES ENABLES US TO CAPITALIZE ON SOLID SKILLS DEPLOYED IN AFRICA SINCE Network Management Performance optimization. Curative/preventive/conditional maintenance, renewal policy. Wealth management (maintenance vs. renewal). Emergency management. Management of connections. Work in trenches. Common management of both services can also bring cost optimizations Similar billing rhythms. Common invoice. Developing new means of payment applicable for both water and energy fields and identical tools (call center, internet, cell phone) Research on fraud and cut for unpaid. Customer relation management and proximity to end users Optimization of billing performance. Meter readings. Smart meters and connected objects. Renewal of meters policy. Customer response management. Customer database development and outgoing calls. Training and Skills Management In Gabon (Jean Violas training center), Niger (CFPPME), training centers are used to train on energy fields, but also for training on transverse skills for both water and energy fields (see above).

9 9 CONCLUSION PERSPECTIVES The development of energy in Africa will require substantial funds 9 to meet future demand. As a global reference of the optimized resources management, Veolia will continue to develop its activities in this area in the continent and in particular in renewable energy. To do this, we will depend on the skills of the group in the world and in particular in Africa along with public donors and private investors to secure the financing of projects based on permanent infrastructure that will give Africans a secure access to electricity services. Resourcing the world. It is not only our mission, but also our contribution to sustainable economic development and social progress of Africa. 9 World Bank made it a priority and «Energies pour l Afrique» estimates that 200 billion investments are needed over the next ten years to achieve the goal of electrifying the continent by 2025.

10 10 ABOUT VEOLIA Resourcing the world a Veolia Africa & the Middle East 38, avenue Kléber Paris Cedex France