Giacomo Bonfanti
Commercial Director
GDI
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View from the Top

Pipelines Expertise at the Service of Renewables

Wed, 02/22/2017 - 16:10

Q: How did the company branch into renewable energy from the mining and oil and gas sectors?

A: We have experience in diverse sectors and throughout this time it has always been necessary to adapt to the country’s context. For the past two years, we have studied the intricacies of renewable energy projects, capitalizing on our experience in other sectors. For instance, our work in the mining sector involved the mobilization of large volumes of soil in a short period and wind farms require similar processes. Mining companies also require the construction of dams to manage water and mineral residues. These dams require a complex construction process because they must be adapted to existing environmental regulations. Our objective is to capitalize on this knowledge and begin building hydroelectric dams. We have also been using construction techniques that allow miners to work without damaging the environment or bothering the local community. This technique is being used in Switzerland and it can also be used in hydroelectric plants, mainly small hydropower facilities. Many of our technologies can be repurposed for the renewable energy sector and we are prepared to enter the wind, solar and hydraulic markets.

Q: How do you identify the technologies in which you need to invest?

A: Developing infrastructure for renewable energy requires a significant investment in equipment. In comparison, the construction of a building requires less specialized equipment and most of the investment goes to management. For that reason, many companies with a focus on renewables prefer to use their equipment for similar projects all over the world. In our case, we decided to focus on Mexico and to do so it was necessary to research different uses for the same equipment. For that reason, whenever we have to invest in equipment we must think of what we will be doing for the next five years.

Q: How have the energy market changes influenced GDI’s evolution?

A: During the past six years, we have seen greater investment in infrastructure projects, which has reduced the need to finance them through government debt. We have decided to transform into a contractor capable of offering turnkey projects, which can guarantee owners the protection of their investment costs and infrastructure. This strategy has some risks but we have positioned ourselves as constructors capable of handling complex projects from engineering to construction, giving us an advantage over other developers. We have built over 2,500km of pipelines and we are capitalizing on this experience. The key to our growth was a comprehensive knowledge of our capabilities and a clear identification of our weaknesses, looking for strategic alliances with companies that can complement our services. The future of renewable energies will require a clear identification of the best players in every area and to establish partnerships to achieve the best results. GDI now handles engineering, earthworks, civil works, mechanical works, logistics and supply services. We also offer community, permitting and environmental management services and we work to ensure the best possible results for our projects.

Q: What are the main risks that project developers face in Mexico?

A: The acquisition of sites can be problematic. The situation is different for developers of wind or solar parks than for developers of pipelines, the latter being more complex. It is necessary to fully align the interests of the federal and state governments with those of owners and contractors. The Energy Reform is fairly new so many are unaware of its importance and necessity. It is common for these projects to be halted mid-project for one reason or another. It is necessary to create awareness of their importance to gain the support of local communities. We are developing several projects in 2017, including a pipeline in Bajio and another near the US border. We are waiting for new tenders in March and August for which we will offer our support for solar, electric and small hydro projects. This sector moves at great speed so some players may bid for a tender and only look for a developer if they win.