Vanuatu, Republic of: Interview with Mr. David Lefevre

Mr. David Lefevre

General Manager (UNELCO)

Mr. David Lefevre

Vanuatu, like all countries in the region, is striving to attract foreign investment. What would you say are the country’ most significant competitive advantages both generally and in terms of energy compared to other Pacific Island?

First, off course and so far, we don’t have any income tax. It’s the only island in the Pacific in this situation. So many things are to be create and there are a lot of opportunities for the investors and also for the people who just want to bring new services and new things in this country. We don’t have so many services and we don’t have many people having an access to those existing services. 70% of the population is disconnected from the electricity and the water networks. Expect for the IT. In this case, most of the population has the mobile phones but still on some islands they don’t know how to use the mobile phone. I think it’s an opportunity for many people in many things to create in this country. There are many islands where just everything needs to be done. It’s not very good for the population but for the investors there are the opportunities with mobile phones and even in the energy. We are overate amended for the companies who could come to bring and to supply this kind of services in other islands. We don’t want to bring everything by ourselves.  It is just impossible. You can imagine the 70% of the population to be connected, it is just impossible. We have to find more reasonable balance between investment and the good services the challenge and opportunities.  

According to our research we note that you have been in Vanuatu only since 2014. However, bearing in mind your wealth of experience, could you give us an overview about the energy sector that Vanuatu presents?

Like I have said there’s only 70% of the population connected. We have two main operators UNELCO as on all Efate, part of Malekula, part of Tanna and small part of Santo too and the other islands. So it’s mainly for Efate, Malekula and Tanna. It’s between 20% and 50% based of renewable energy. On Efate itself is 20%. We could reached 80% to our own but for that we need to make more renewable procumbent copra oil because our engines are able to run with copra oil. It’s green engine. It’s the shame that we are not able to make a decision regarding the procumbent of copra oil to make it more interesting regarding the prices, because we believe that it is very interesting for the country. It’s green petrol for the country. You can fixe population on the islands, you can use also waste of copra oil to feed the cattle, pigs and you don’t need to use the chemical products. There is so many things to do with copra oil.  We are realistic we know that it’s not for now. We know that it will be very difficult to reached 80% of renewable energy only with copra oil even if technically speaking we are able to do so. In Santo, I think it’s mainly based on Hydro and it was paid by Japan, Malekula depends on the price of copra. It can be 100% green and we are talking about twenty five thousand customers, so it is a small market. We have, off course, an investment plan for the next years. In the next three years we should have completed the ring of Efate. By 2020 all of customers of Efate should be connected. We work a lot with internals like India, China, AUSAID, NZAID. We have those kinds of donors and also we work with World Bank, ADB, EU. There are grand proposals and grand loans to speed up the government. It’s to archive a lot of project going on already and we have many extensions in Malekula. We should multiply by four numbers of customers in the next two years and make extensions in Tanna and Efate. It’s true that to redevelop electricity it’s a lot of things coming.  It is a little complicated because you can’t just build the network or create it. Most of the time you need to develop the standard solution and such more complicated.

UNELCO was established in VANUATU since 1939, and over the years UNELCO has become the enterprise and the utilities concessionaire for the production, transport and supply of not only electric, but water. Could you give us a brief history about the company and UNELCO’s major developments?

We are the major enterprise that plays a key role in the development of the country. We also have the reliability especially in the country where most of the GDP is based on tourism. You can’t have hotels if you don’t have good reliability. I think we are second rang of the south pacific in terms of reliability. For the small country like Vanuatu, I think it’s a good achievement. I think we were also first promoter of renewable energy in the country as we invested maybe 50 years ago in the engine able to accept the copra oil without diesel. We also implemented three megabits solar power system it started in 2008. In the beginning of this year we implemented 500-kilowatt solar plant, so we should be able to reached 80% in terms of renewable energy. I think we set up very good fit back from the government, the customers, the businessman and many people regarding our performance of recovery of the Cyclone Pam. When the Pam passed on Vanuatu, zero customers were connected to the grid.  We did not have any customer connected to the grid so we had to, maybe not rebuild everything, but we got a very big challenge. Fortunately, we are belonging to international group, Engie. It is a real advantage for us because we were able to have many colleagues coming from Tahiti, coming New Caledonia to assist us. We shared some methods to work and I think it’s very important for the government because the first day we were able to restart the power for the hospital, the government and also for the essential services. Four weeks later I think 95% the customers were on. Then we need to work on the 5% because there are the remote places.
We contribute to improve the quality of work environment because work in the same standard in the group so our staff benefits from the same kind of advantages like the personal insurance, personal health visits as well. It’s not the case of the business in the other countries.

The mission of UNELCO as utilities provider is described as: “to ensure the uninterrupted supply of electricity to homes and businesses and to provide quality service that meets the smooth operating requirements of your equipment.” What you main priorities in these areas? What are the major challenges you face in order to fulfill these priorities?

Those challenges are focused on regulatory environment. The World Bank is ready to implement the regulation office and it’s just no well and unfortunately it’s not done reasonably. Those implements will destroy the company like UNELCO so it’s not good at all. And rather than straggling and go to the court with the regulation we should work more with the government in the country. That is the biggest challenge we have been facing for many years now and it should be fixed in the few next months. We had a very positive feedback from the court so now the things should change and as soon as it’s done we will be no more in this situation and then we will be able to speed up the development. However, I think that in the most of the Pacific Island Countries they don’t have any regulations so it’s not a good thing either but most of the time it’s state owned company so it is considered that it doesn’t need to be regulated. It’s not problem to being regulated but it has to be done fairly. You can’t just squeeze utility or try to squeeze the utility. When you try squeezing the utility and 70% of the population has no access to the rate is not in the right order. So first of all it should be focused on the access. So this is the biggest challenge we have to face. Otherwise, we believe that the cooperation and relationships with Vanuatu is quite good. It can be a problem with the instability. I have been linked with the country since almost three years and I already had to deal with four different Ministers of Energy and Water. However, it is not just Vanuatu. In many countries there is this kind of instability. It is also business. I think those are the two (2) challenges we have to face.

We can read also form your website that over the years UNELCO has become a professional and innovative company. You know that HBR is well renowned for publishing break thought ideas about innovation. Could provide us with some examples about how do you apply innovation into your work in UNELCO?

The innovation, it depends. If you compare with the big countries like Australia, New Zealand, USA in this case in Vanuatu we have not been so far very innovative. If you compare with other islands I think the biggest innovation was the copra oil. Fifteen years ago the man who has this idea was very clever. For Vanuatu this strategy was very innovative, very original at that time. We are pretty sure that we were one of the first ones in the Pacific using the wind farm in 2008. In Europe or in other countries it was in the nineties. W did that maybe ten years ago for our small domestic customers to manage themselves the consumption. We have tried also to stay in line with environment. It’s not really impressive but we always tried to be pragmatic. Instead of being concentrated on the high technology, we just try to be focus on our customers, and for the last four years we were the best utility in the medium size because we were available.

PERVIS Group - a US power company was granted acceptance to take-over as the new company to provide electricity and water services in Luganville, Santo. What are you strategies to maintain the UNELCO’s top position in Vanuatu over the rest of new competitors?

We don’t have a feeling that we try to stay as first one.  Like I’ve said before, our main issues are regulation and environment so our first goal is to defend our entrees. We just want to be treated fairly. This is the first challenge that we have to address. As I said, we are perfectly aware that we won’t be able to be the only one to develop the country. It would take too long to build so many facilities off grid and on grid and just impossible to do it by ourselves. We want to be reasonable. We just want to have a reasonable return on our investment and that’s all. We don’t want to be first one and have the advantage to be the biggest. We just want to do things pragmatically, smartly and have other reasonable profits. These are our goals. We stay in line with the policy of the group, so we have to assist in that transition. So we have no strategy or policy to stay as the first one.

In September you underlined the company's commitment to the community. "We're a 98% Ni Vanuatu Company. We really want to end our image as an outsider." How would you like UNELCO to be perceived?

Actually, it was a translation from French, so it was not really my quote. Anyway, that is true that we are often seen as a French company. We have being operating in the country for eighty years and 98% of staffs are the Ni-Vans. Now, we have opened our shares to local investors so now VNPF is also a shareholder. Despite all this facts we are still French company.  We just want to be clear with the operations. We have to communicate better, to make that clear that we consider that we are Ni Vanuatu company belonging to international group. It’s not because shareholders are French so this is a French company. It’s not our feeling.
Internationally, we belong to the international group. UNELCO is just a local brand, so we don’t have any plans to developed UNELCO on international stages. Locally we would like that people be aware what we do, that they say what we have to improve. Energy is always too expensive it’s not very popular company. However, I want to be criticized also by our customers but positively criticize. We would like to know what do they want us to improve.

On a more personal note, talking now about you professional background, could you explain us what is the most important lesson you have learnt over the years about management and leadership?

The first one is to stay very positive, to never judge and to transform everything in a new challenge just try to improve things day after day. My second point is to be very open and comprehensive, with the open doors for the government and earned customers. It is very important to try to provide the transition behavior.
Here we have to be reactive in terms of business model. The utilities as it was done ten years ago or fifteen years ago are not possible anymore so we are very flexible regarding to the business model. Then of course the importance of, I don’t think it’s positive word in English, but lobby. It’s very important to have good relationships with everybody but again trying to be right, just discuss with the right person. To be very clear, I’m not talking about corruptions. It is the most important thing, to have a right person in front of you and then bring your arguments and tried to explain our vision.

To conclude the interview, the readers of HBR include some of the most influential leaders in terms of politics and business. What message would you like to send then regarding Vanuatu and UNELCO?

I think if we work all together as the government and the utilities, the regulation and then investors we can really improve the life of population in the country and we need to accept to work together. Further more investors can come from foreign countries. You just have to be aware that it’s not only that every country is different. Because sometimes people just come from foreign countries and they think that if something worked in one country, it needs to work everywhere. So just take time to understand the specific skills of the country, especially in remote countries. If we all work together it doesn’t matter, but most important thing is to make what will build sustainability. Sometimes it’s more relevant to build the partnerships to make us more sustainable.