Mamadou Diop, Marketing and Business Development Manager of Invest in Africa
Energy Capital & Power (ECP) spoke to Mamadou Diop, Marketing and Business Development Manager of Invest in Africa (IIA) about how the company is assisting local SMEs increase their participation in Senegal’s oil and gas sector. By introducing SMEs to a wide range of opportunities, assisting with financing, and promoting the role that local companies have to play in the region’s burgeoning energy sector, IIA is committed to enhancing local capacity and driving socio-economic growth.
Please provide an overview of IIA?
Invest in Africa was created in 2012 and is a cross-sector partnership of companies working together to build the capacity and the capability of local suppliers/SMEs by creating better access to skills, markets and finance. At the heart of IIA are our partners: international and local businesses across sectors that share a common commitment to empowering local enterprises and creating jobs. IIA have had a presence in five African countries; namely, Ghana since 2013, Kenya since 2015, Senegal since 2018, Mauritania in 2019, and Zambia in 2020. The purpose of IIA is to manage local content for international companies, especially those in the extractive sectors.
We came to Senegal in 2018 and worked with two of the main operators in the country, BP and Woodside. They had seen the great work that IIA had done in Ghana and Kenya, so they have asked us to come to Senegal, establish ourselves and manage the local content for them. In Senegal our budget is mainly covered by the operators, BP and Woodside. So, we don’t charge SMEs for any services that we may provide to them. In terms of the impact that we currently have in Senegal, we have been able to facilitate or host 57 tenders onto the IIA platform and 26 local SMEs won contracts with several buyers on the platform (operators as well as Tier 1 contractors).
Access to finance is one of the single biggest challenges that businesses in Africa face, very often due to the high cost of credit. How does IIA work to help its partners obtain better access to finance and thus be able to actually execute their projects?
What we have done here in IIA Senegal is map out the different challenges that SMEs are facing in accessing finance and have signed a partnership with three local banks Orabank, Credit du Senegal, and Ecobank. The idea of the partnership is that the banks will give us their lending criteria, and based on those, we identify SMEs within our platform that meet those criteria. We then prepare those SMEs, and send them to the banks for financing. However, the final decision will always be with the bank, depending on whether they want to finance or not.
We have facilitated $4.1 million worth of financing only since last year. the objective of IIA is by 2027 to facilitate $1 billion worth of contracts to African SMEs, thereby creating 100,000 jobs. As of today, when we look at the impacts, without taking into consideration our activity in Senegal to date, in Ghana and Kenya alone, we have already facilitated USD 3.5 million worth of contracts, and created or supported 36,000 jobs.
What does IIA do to promote greater innovation that helps your members boost their productivity and performance, and to what extent does developing human capital here in Senegal can contribute towards this objective?
I think the PSE is quite important and it’s the vision of the H.E. President Macky Sall. Since there’s a new discovery of oil and gas in Senegal, this falls right in the dot. So therefore, we do believe that investing in human capital is quite critical to the ongoing success of the country. IIA is exploring how we can best work with the government and see how we can bring our support and know-how to help meet the goals of the President in terms of driving the local economy to the next level and setting up programs that can be beneficial for our youth and future generations from these new hydrocarbon resources.
What role do you believe that projects like Grande Tortue (GTA), or Sangomar will have in transforming Senegalese industry and the country´s economy over the next five to ten years?
We do believe that there will be a huge transformation. What we are currently seeing is that a handful of local SMEs are trying to meet the international standards in the hopes to win contracts with the different operators and contractors. However, in the outer circle of the three layers there are what we sometimes call the “the low hanging fruits” where immediate opportunities could be captured by locals. That’s the reason why IIA’s role is to inform local SMEs about the opportunities, so that they can be fully aware of what is coming and best position themselves to capture those business opportunities. Because, at the end of the day, if the local SMEs are not aware of what the main opportunities in the oil and gas sector are, then these will be taken away by foreign companies.
That is why IIA informs and supports them, and helps them in terms of meeting international standards. It is the reason why we regularly organize workshops to help those local SMEs get up to speed. Furthermore, it is why we approached the African Development Bank, and told them we needed their support to do our work in a much more efficient way so that most of the local SMEs can profit, because working in oil and gas requires international certifications, and it costs quite a lot of money to get certified. With the IOCs and the oil and gas industry as a whole, it is like the Champions League. So unless you’re at Champions League level, you’ll simply not be able to play.
IIA currently works with a number of key players in the oil & gas industry. What have been some of the challenges so far, and the things you have been doing so that the relationship between the IOCs and IIA continues to thrive?
I can ONLY talk about BP and Woodside because they are the ones that brought us here, and have given us the relevant information that has enabled IIA to be where we are today. They have been supporting. At the end of the day, oil & gas in Senegal is a new sector and no one knows it in depth because the large-scale discoveries are very recent. This is an emerging sector in Senegal, and that is why it is important to support the local players.
IIA has over the years been involved in a number of investment conferences, webinars and events. What impact do you believe that such high-level conferences such as the upcoming MSGBC Oil, Gas, & Power 2021 can have in terms of promoting energy-sector investment and developing new business opportunities in the MSGBC region?
When you partner with the Ministry of Petroleum and Energies, COS-PETROGAZ, and COPERES I think you will really achieve the visibility that you are looking for because these are the top institutions that basically cover everything related to the oil and gas and renewable energy sector here in Senegal. As I mentioned, we have approximately 1,776 credible SMEs that are within our platform, but that is also because we have received strong support from the government and IOCs. We also believe that the MSGBC Oil, Gas & Power 2021 conference will be phenomenal, and we are convinced that many companies will be attending, as it will be in their interest knowing that Senegal has discovered oil and gas and is very well positioned to becoming a key player in the MSGBC Basin. There will be lots of topics that will be discussed in respect to Energy, oil and gas, exploration opportunities. new licensing cycle, natural gas revolution, and much more. This will be quite important for local SMEs to attend, to be able to meet with all the international companies and facilitate joint ventures and cooperation on new projects.
To conclude our interview, what would be your final message to investors about Senegal and the country’s potential as an investment destination, and why they should consider IIA as partner when doing business in the region?
I would say that I would welcome them to Senegal as it is a very stable country. Secondly, we want to ensure that local businesses also get their share of oil and gas. So we welcome any international companies that are willing to come and enter a Joint Ventures with local SMEs that will result in knowledge transfer, because it’s quite essential for local SMEs to also have the capabilities within 5 to 10 years to do it on their own. We welcome investors coming to Senegal because this is a brand-new sector for all of us, and they will definitely need the expertise and experience in the oil and gas industry, and also their know-how. And eventually at some point in time, in the long run, Senegal will be able to grab the ball and run with it.
In response to growing demand for renewable power, and increasing interest by international stakeholders to invest, develop, and succeed in Africa, Energy Capital & Power will hold the MSGBC Oil, Gas, & Power 2021 conference and exhibition on the 2-3 December 2021. Focused on enhancing regional partnerships, spurring investment and development in the oil, gas and power sectors, the conference will unite regional international stakeholders with African opportunities, serving as a growth-oriented platform for Africa’s energy sector.