OBG talks to Luis Castilla, CEO, ACCIONA Infrastructure, Water and Services

Interview: Luis Castilla

What is the main financial challenge for large-scale infrastructure projects in Gabon?

LUSI CASTILLA: The main constraint is the limited size of local financial markets. Domestic banks have insufficient experience in financing infrastructure projects and do not often have the necessary conditions to provide long-term credit. Infrastructure projects are a challenge to finance because of their large size, long time-frame and complexity. Most of these projects require input from multilateral development banks and the state. Both the public and private sectors have to find the right tools to encourage infrastructure upgrades and promote Gabon’s economic development.

How can foreign companies successfully adapt to the operating environment of Central Africa?

CASTILLA: The challenges are not that different from working in any other foreign market in Africa. Foreign operators need to understand the culture, adapt to local customs and, most importantly, when it comes to business, have a detailed knowledge of the local legislative and fiscal framework, as well as an understanding of the client’s priorities. In addition, exposure to local weather conditions is also key, specifically in terms of logistics and meeting deadlines. We are already well-adapted to the seasonal work of the dry and rainy seasons, and coordinating these in terms of logistics.

While the rise of infrastructure construction in Central Africa provides companies with a long-term commitment to Africa, the lack of skilled labour also adds a key challenge. This can be a hidden benefit as, while there is a shortage of qualified human capital, foreign companies also have the opportunity to train young workers according to their standards. To this end, we offered a six-month training programme for machine drivers and trained 30 young Gabonese employees. Due to the good results, some of them have completed an internship and have then been contracted at several of our worksites. Further, in partnership with the National Social Security Fund, we recently signed a cooperation agreement in the field of health and safety at work, which focuses on improving the middle management workforce skills of the Ministry of Investment Promotion, Public Works, Transport, Housing and Tourism, and the Ministry of Energy and Hydraulic Resources. These kinds of schemes will allow people to access not only a job, but to learn a profession.

As demand for imported building materials continues to rise, what are the logistical challenges?

CASTILLA: As in many African markets, most products and materials have to be imported. In this regard, accurate construction timetables are very important. All the needs have to be predicted six months in advance.

Owing to our long experience of working in Africa, we have not experienced problems in accessing or importing building materials. However, there are logistical challenges to transporting imported products and materials internally. In 2013, for example, we had to transport several 16-metre, carbon-fibre beams to Iboundji, a Gabonese village, to build a micro hydroelectric power station and Africa’s first carbon-fibre bridge.

Costs can also be an issue, as the vast majority of construction products and materials need to be imported and therefore prices automatically increase.

In what way are public-private partnerships (PPPs) encouraging Gabon’s growth and development?

CASTILLA: PPP projects are only viable if contractual obligations are clear and if a stable legal framework exists to guarantee the rights of private infrastructure investors. In addition to the solid legal framework, factors such as the country’s political stability and the Emerging Gabon national development plan, a long-term vision lasting until 2025 that will enable Gabon to become a developed economy, also play an important role in attracting engineering, construction and services companies. Gabon meets these requirements and can therefore be considered one of the most interesting markets in Central Africa when it comes to PPPs.