Renewable energy

“It is my wish that investors in Africa negotiate on equal terms."

September 20188 min readClimate FinanceEmerging Markets, Energy

Sustainable and long-term investments are a major topic these days. Sheila von Hoerner is a high-powered career woman who works as a local developer in Uganda for companies that are geared towards the business of renewable energies – including responsAbility. This business offers almost limitless growth prospects and, more importantly, catch-up potential in Africa.

Tasked with providing renewable energies for Uganda: local developer Sheila von Hoerner

PRESTIGE: Sheila, what renewable energy projects are you currently working on, and how would you describe your work exactly?

SHEILA VON HOERNER: At the moment, I am working on four to five hydropower projects for local electricity supply, which are in different stages of development. Two of the projects are particularly important to me because I was involved in them right from the start, when the main task was to identify suitable locations. Besides the choice of locations, my duties include examining the profitability, localising problems and finding solutions. But it also involves minimising potential risks and, above all, to negotiate and mediate between all involved parties.

Sheila Von Hoerner

The native Ugandan Sheila von Hoerner studied at the world-renowned Scottish university St. Andrews, has lived and worked in Kenya and Egypt, and was actively involved in the field of international political relations between the US and Africa during her time in Washington DC.

This background provided a perfect basis for her current job as a local developer in which she not only sets up challenging projects for renewable energy investments in Uganda, but also successfully brings together people from diverse cultures.

Sheila von Hoerner has been living in Zurich for two years, together with her German husband, whom she met eight years ago during her studies at St. Andrews.

Do such duties mean more to you than ‘just a job’?

Some of the projects are actually like my own babies. You identify very strongly with them, and the local community becomes almost like family through the close cooperation. And, of course, you want the ventures to work, and you do everything to protect them from external threats as well.

As local developer, you are the connecting link between the energy companies, the government, the investors and the local community, but also between very different cultures...

That is correct. Compared with business conditions in western European countries, you need to have a bit more patience here in Uganda. If you work in Uganda, you must understand that it is more important to build up a good relationship with the people than to have a demanding attitude that encounters resistance as a result. On the other hand, I explain to our government that executive boards and foreign managers would welcome faster business settlements. Basically, however, it always involves speaking openly about the challenges and expectations of all parties.

You are working with hydroelectric plants in the field of impact investing. What is the basic idea behind this?

High-impact investments are essentially investments in companies that focus not only on pure profit, but also on sustainability, ecological responsibility and a positive impact on the living conditions of the population. It’s about long-term investments in inclusive business models worldwide and about collaboration with local partners.

You work for responsAbility, among others. What role does this asset management company assume in this regard?

Through its investment solutions, responsAbility manages assets that are invested in emerging market companies. As such, it acts as an asset manager for investors from the private, public and institutional sectors. Of course, there are also many governments that are involved in large projects but would like to participate in smaller and medium-sized projects – like the ones we implement – and require a ‘middleman’ for this. responsAbility then takes on this management function with investment managers on the ground in emerging markets and thereby enables investors to gain access to new growth markets in inclusive business. Profitability, risks and ecological implications are carefully clarified and examined in the process.

Renewable energy for Africa at responsAbility Investing

What is the benefit of investing in smaller or medium-sized hydroelectric plants as opposed to large power stations?

The most important benefit is a much larger impact on the local community and the country. The positive effect begins right at the start. For example, if you evaluate the feasibility of a project and you collaborate with local consultants, jobs are already created at this early stage. For us, partnerships with local shareholders are of interest so that the knowledge and profits remain in their own country. Major projects that involve big players generally involve large consulting firms from other countries and exclude local participation.

Sustainable investments also focus on responsible interaction with nature.

Could you perhaps give me an example?

Yes, certainly. If we involve, for example, the community in the construction of a hydroelectric plant, it promotes engagement and responsibility, while creating jobs. This is also the case if the local women cook for these 300 or 500 workers. If you had a major project with 20,000 workers, the capacity of the local women would clearly no longer be sufficient.

Do you believe that today’s zeitgeist of wanting to ‘do good’ and to act based on values is what makes these types of projects and investments possible in the first place?

Yes, I think that the will to really change something certainly plays an important role. If you look at the past, there was barely any private sector involvement in infrastructure projects that aimed to have a sustainable and positive effect on countries and individuals. It is possible that this intrinsic idea of wanting to achieve a real improvement in local living conditions simply didn’t exist at that time. The willingness to invest ‘patient capital’ in projects for the long term has risen enormously today. In Uganda, too, there was no private sector involvement in power generation until a few years ago. It was commonly thought that this was a matter for the government, which should also take on the risk and help itself. However, today we have asset managers, like responsAbility, that are making a line of business out of it while focusing on sustainable development goals at the same time.

Sheila von Hoerner: the focal point of all activities.

How would you describe Africa’s entrepreneurial spirit?

African society is very entrepreneurial from the ground up. As such, someone can work from ‘9 to 5’ while weaving bags, for example, as an additional activity. Of course, the primary sales market is then the office in which one works. This happens all the time, and it often begins with small things. But capital is needed in order for these things to grow, to become more structured and to have the capacity to reach a high level. This is where we come into play. Through investments, the company becomes more successful and can also be shaped in a more sustainable way as a result. Another challenge that I see is that many companies – and I’m speaking about Uganda here – are often just ‘one generation’ companies. When the father or mother dies, so does the business. In Europe, many family businesses exist for decades or centuries. They are built up and expand. If we now have the possibility in Uganda to get involved in long-term business models with the help of responsAbility, then I think we are reaching the point where we, too, will still be working with Ugandan entrepreneurs in the power generation business in 100 years. This will also mean that the ‘one generation’ dilemma has been overcome.

Access to electricity is a key topic in Africa and offers immense potential. What is your own personal vision in this regard?

First and foremost, I want to make sure that my projects are sustainable or will become so. However, I think it is also very important that I personally do everything possible to make a small difference through my work. In the longer term, I would be very happy to see that a larger proportion of the population has access to electricity – and can also afford it. The average access rate is currently only about 21 to 25 percent here in Uganda. In order to achieve this goal, it is necessary to involve local people in the projects because if the people don’t have a role in the projects economically, they will never be able to afford the electricity. Electricity releases a lot of strength in people. You only have to look at the enormous significance of smartphones in Africa. These are used to conduct business, and they also serve as a payment platform. But electricity also means better medical care, political stability and aspects that can’t be classified in monetary terms, such as the reduction in mortality rates.

Hydroelectric plants for power generation offer enormous growth potential in Africa.

Sheila, what is your wish for Africa?

It is my wish that investors in Africa negotiate on equal terms. We certainly don’t have the necessary capital for everything, but we have the capabilities. It is not about helping Africa, but about genuine commercial partnerships that focus on what each side can contribute in order to be economically successful. This is another reason why I really love working for responsAbility because I have rarely seen such fair negotiations and discussions. If we could support more things using this mindset, then I see a long, positive development path.

This article appears courtesy to PRESTIGE magazine which published it in Volume 48, Autumn 2018.

Text: Anke Refghi, Photos: Thomas Egli