Vanesa Revelli
Latin America Director and CEO of Argentina and Uruguay
ABO Wind
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View from the Top

Exploring the Early Steps Taken by New Player

Wed, 02/24/2016 - 18:06

Q: Who is ABO Wind, and what do you believe makes the company different from others in the segment?

A: ABO Wind is a German company that is well- established in the European market and has experience generating electricity from different technologies. Our core expertise is wind energy and besides designing, constructing, and operating wind farms, we also help fund projects through our sister company called ABO Invest. We have been operating in Latin America for the past ten years and our main priority is to enter Mexico. Our goal is to have a fully operational subsidiary in Mexico by 2018, and in order to achieve that, we must work to offer the same range of services in Mexico that we do in Germany. We want to develop, construct, and operate our own wind farms as well as those of third parties. Mexico is developing its industries, and to achieve this it will need a lot of energy. The country offers everything a company like ours needs, it has a vast wind potential, a solid supply chain, and experienced human capital. We believe that our company will be able to thrive in the landscape that has been created in the country and that we will be able to take wind farms to the level Mexico deserves.

Q: Before entering the country, companies assess the risks involved. What challenges has the company identified, and how do you plan to overcome them?

A: We are aware of the challenges we may encounter and we are ready to combat them. It is important to work with local authorities in order to be sure that the approach we are taking is the most appropriate. Besides government agencies, we believe it is also important to establish local partners. Another factor that concerns us is transparency when conducting business, and for this reason we will be very rigorous when carrying out our due diligence activities in order to ensure that we are working with the right companies.

Q: Once you enter the country, you will have to look for local providers. How will you ensure the implementation of the best technologies in your wind farms or solar parks?

A: When selecting our providers, we seek those with a solid understanding of the Mexican culture. We are looking for professional companies that adhere to corporate values.Many equipment providers we work with in Germany are also global companies, so we can collaborate with them in Mexico. Of course we also want to help develop the local supply chain, thus we will definitely look to cooperate with Mexican companies. Our main priority is to establish an autonomous and independent subsidiary by 2016, so we need to find the right people to ensure our company’s success. In order to achieve this, we are working on projects through joint ventures to generate enough capital to install our subsidiary so that we can later on take projects independently. We are now working with small companies in Mexico but it is a mutually beneficial situation for all parties, since they can expand their knowledge and we begin to build a reputation.

Q: What are the company’s ambitions in the Mexican wind market?

A: We would like to begin with a medium-to-large project, such as a 50MW wind farm, and of course we want to be involved in the development and construction stages. There are many locations in Mexico that hold a solid wind potential, like Oaxaca, but we are not interested in entering this state because it is already saturated with wind players and it lacks infrastructure to connect us to the grid. At first, we were looking at Ciudad Victoria, Tamaulipas, but security there raised questions, so right now we are considering states like San Luis Potosi and Jalisco. We have been working closely with a legal firm in Mexico that advises us on the best jurisdictions in which to invest and the ones that will see increased potential as security matters improve. One of the main challenges that we have detected, besides security, is access to the grid. The way the energy distribution system works in Mexico is very different from other countries. There is a lack of information about power lines in Mexico, meaning it is difficult to locate substation or transformers for connection. This, of course, makes our job more difficult but thanks to our local partners we now have strategies to address this issue. Our company stands out in the sense that it is capable of delivering full results within time and cost parameters. We are a company that invests in R&D, and we are looking at innovative power solutions, for example, through hydrogen. Opportunities abound in power generation and through R&D we can seize them all.