Interview for Norman Ndaba: Sector Leader - Power & Utilities at Ernst & Young

Norman B Ndaba a director and sector leader for Ernst & Young's Power & Utilities sector group and is responsible for strategically positioning and developing market opportunities for Ernst & Young in the Southern African energy sector, prior to joining Ernst & Young, he spent 15 years in various positions and locations in the downstream oil business of Royal Dutch Shell. He has had extensive exposure to strategic marketing planning, project investment and evaluation analysis, and participated in strategic internal and external studies.

Q1 - As a global professional services firm, how long have you been in the energy business in Africa and what are your major mile stones?

Ernst & Young is celebrating its 160th year as a professional services firm in Africa albeit a major portion of those years primarily in South Africa. Presently, we are represented in 28 countries in Africa and in 2008 successfully integrated 87 countries into one area across Europe, Middle East, India and Africa (EMEIA). This integration development puts Ernst & Young at the forefront of professional services firms in Africa and enables us to respond quicker, consistently and seamlessly to our clients' needs. Another major milestone is the achievement of a diverse and professional staff corps second to none.

From an energy perspective, Ernst & Young has serviced the industry since inception of energy commerce primarily in Nigeria and Africa due to energy-use intensity in these countries. Major milestones, to name just a few:

· Ernst & Young provides professional services to two of the oil & gas majors, namely BP, Total as well as Petronas and its African downstream subsidiary Engen.

· Further, Ernst & Young has assisted numerous private clients and public sector organisations in restructuring, resizing, business process re-engineering, performance improvement and advisory services in tax, corporate and project financing across the continent.

· Ernst & Young also works with funding agencies, such as the World Bank, African Development Bank, International Finance Corporation, Development Bank of South Africa and the Industrial Development Corporation of South Africa across a broad spectrum of energy and infrastructure related projects.

Q2 - It is axiomatic that Africa has significant potential in renewable energy. The good thing is that fulfilling this potential will significantly enhance the economy. What part do you think your firm is able to play in the area?

Africa is subject to international demand and supply energy tensions. This compels Africa to turn to energy sources that are both readily available and low in cost for the development of African market economies that require unprecedented increases in energy consumption. To realize Africa's potential in renewable energy, governments, civil society and private enterprise must focus on strategies to make alternative, renewable technologies a significant part of the energy mix by 2025, whilst at the same time optimizing the current fossil-based energy economies.

Africa's energy outlook is not dissimilar to the global situation, though for different reasons. However, the same effects are manifested – high cost of energy, competition for resources and rising costs of production.

Ernst & Young has large dedicated renewable energy teams across the world and a seminal thought leadership publication in this area is the Ernst & Young Country Attractiveness Index (Refer to attached document) that ranks countries' attractiveness for renewable energy investment.

Q3 - We have seen a lot of entrepreneurial ideas in the energy sector in Africa. How much responsibility do you think is incumbent on the government and how do you balance that with public-private partnerships?

For Africa to change the way that energy is used, a dramatic and bold behavioral change in how governments and private enterprise engage is needed. This change can be aided amongst others, by enacting relevant, clear and uniform regulatory and governance legislation across all public and private energy activities to affect sustainable behavioral paradigm shifts in energy use.

A public-private partnership is but one method of achieving practical investments in improving shareholder, stakeholder, board, and executive management governance processes to increase investor and civil society confidence on public expenditure.

Q4 - How would you describe the level of development in African energy regulation?

There is room for improvement. Various countries are at different stages of maturity with respect to energy regulation and of course due to the global nature of energy activities, most countries by definition will always play a catch-up game. As an example, the time it takes to start a new business and to appreciate all the relevant laws applicable differ from country to country. That is just an example of how immature the investment climate is across Africa.

Q5 - You have a significant presence at the World Economic Forum. What are you seeking to achieve?

This year, we have five senior partners attending the World Economic Forum including Philip Hourquebie, CEO: Africa at Ernst & Young. The theme of the Forum this year is “Rethinking Africa's Growth Strategy”, which is a solid indication of the importance that the rest of the world places on investing in Africa. Ernst & Young firmly believes that Africa is open for business!

Q6 - What more do you think the African focused energy companies can do to capitalize on the opportunities available in Africa?

This is a two-way street. Public and private enterprise should start the paradigm shift mentioned earlier in affecting how business is conducted in Africa. We need transparency, good governance, public-private partnerships that work and Ernst & Young is a willing participant in creating this future. This is our mandate in Africa.