On the back to AEF22, we were lucky enough to talk to one the partners of Hunton Andrews Kurth, Jason Parker.
We talked about:
- Their presence at AEF this year and their objectives
- The energy mi in Africa
- Hydrogen and other technologies
TT: Good morning, everybody. It is always a pleasure to see you here on renewables in Africa channel. We bring you a very interesting people, shakers and movers of the industry in the African continent, but also beyond. Today, I want to talk to you about somebody very interesting. I want to give him the pleasure to introduce himself to you. Welcome Sir. Would you mind introducing yourself because I’m sure a lot of people are curious to find out who you are, what you have done and why is that Tony is talking to you today.
JP: Okay, Tony, thank you so much. I really appreciate it. Thank you for the introduction. Hopefully, I won’t disappoint all your listeners today. My name is Jason Parker. I’m a partner at Hunton Andrews Kurth, based in the London office. If you’ve never heard of a law firm, well, let me help. Hunton Andrews, is a US based law firm with global offices. But we have a deep history of doing projects in Africa which goes back over 30 years. We are one of the leading United Sates (US) practices, paying attention to developing energy and infrastructure in Africa and across the continent. So, we have a deep balance sheet of deals. We’re not newcomers to the to the arena, we’ve been here a long time. My practice specifically is renewables, refining, petrochemicals, and surprisingly nuclear. That stretches across continents, but also, I do some of this work in the Middle East as well. In London, we have a number of partners that cover project development, which is one of my specialty areas. I have a background in engineering and we also cover finance funding of large-scale projects. lastly, we do a lot of work helping governments procuring projects. For your sake, Tony, it is procuring renewables, that’s an area we specialise.
TT: That is very interesting, because as we’re talking, I could see that we have at least two things in common. Number one, we are both engineers, and that we are doing other things now, right?
JP: That’s right. We found our way somewhere else.
TT: So, why did you leave? In theory? Were you following the money?
JP: No, of course not. It was purely altruistic. If you can’t tell from my accent, I’m American, but I relocated to London. My move out of engineering was to become a bit more global than the work I do. I love working across cultures. At the end of the day, it is people who matter and providing services for people working with different people getting different takes on things is something you can do in engineering, but when I started my career, I was in Barberton, Ohio making nuclear reactors for the US Navy. That’s somewhat isolating, because you don’t really get to travel the world or work across different countries, in that it’s highly secure, pretty close off. So, leaving engineering was to sort of expand my life experience.
TT: Excellent. That’s impressive. And you mentioned that you are coming from a law firm, which is global with offices in Washington, DC. I was in Washington, DC attending a sustainability conference organised by the Economist. I was speaking to moderating there. I don’t know where they were there. But actually, we sort of missed each other because both of us were in Brussels.
TT: And then for the big and huge Africa energy forum. As we were talking just before we started this interview, you were telling me that you are not new to this conference. What happened?
JP: COVID happened. Nothing really replaces in person dialogue. I mean, even this, video we’re doing today, it’s really helpful but I wish we could have met in person in Brussels. You’re here in London. So hopefully, we’ll get a chance to do that in person. Basically, Tony, we had all as a firm participated in that conference for years. It hands down is the leading conference for power projects in Africa and even for infrastructure. Despite the name, all the players are there, the developers, the lenders, the bankers, the assurers and the technical advisors are all present. It’s not just a place to network and gain new business, it’s actually a place to converge with our clients and all the advisory teams and sit down. For this year, we did not have a booth, we didn’t have a stand to sell our goods. We had a meeting room because we needed the space and the time to sit down and talk to people. So rather than flying one on one, down to Zambia over to Kenya, we said “Everyone, let’s converge in Brussels, and we’ll have a chance to talk and push some of these projects forward.”
TT: Excellent. To be honest, I absolutely agree with what you’re saying. I personally was impressed by the number of meeting rooms that were there, because I went and actually looked at them. The funny thing is they were very busy with meetings after.
JP: That’s right. I know deals get announced at the end of the conference, big projects, because people would like to sign on the dotted line to have the media attention but A lot of small things happen too. When new directors who we haven’t met yet, because of traveling restrictions come in town, we can sit with them. Some of the government entities that are really busy when they’re in their hometown, you can finally get their attention when they’re out there. So, it’s a really good chance to meet up with folks. About half of our team was able to join us, folks in Washington, folks in New York, Miami, Tokyo, Dubai. Some came, some still had difficulties getting there. We had about half of our team present.
TT: That’s impressive. My next question for you is; what were your objectives going into the conference? And coming out of a conference? Did you achieve those objectives?
JP: Yeah, absolutely. Objectives going in was making sure that people who could hire us like the government’s, the financers, the lenders and developers, remember our name. We have a common saying, oftentimes, the lawyer you hire is the last lawyer you met. That’s not always true, expertise matters but you have to be present in the room to let them know, this is the space that we plan. We know the industry. We know who’s doing what, where and we can also share with you our market insights. So, if I met a minister from Namibia, I can honestly say, we’re working on two deals right next door in Zambia, we’re working on another deal, Egypt and two others in Ethiopia. This is what we’ve learned and we can apply it to your project too. So, everyone needs to see that you’re present and available, and you’ve got the expertise. Was our objective obtained? Absolutely. We met the people we targeted to meet; AEF made it very easy to identify who we wanted to meet. We met them and convey that we’re here and when you need us, we can come back and see you again. And that’s really the point. We’re not trying to walk away with a new client. We’re trying to walk away with new relationships.
TT: I’m very pleased to hear that. But when I was listening to what you were saying. I noticed that actually, we talked about energy mix in Africa. Your whole experience is actually dealing with this energy mix, which is very interesting because you work with renewables for sure as well as fossil fuel. From your experience, and the deals that you are signing, where do you see the balance tilting? Is it really moving more towards renewables as we hearing people saying or not, because I think as a lawyer, you have seen a lot of those contract coming to you?
JP: A lot is changing. Some of it goes back to the war in Ukraine, and the energy markets. The energy markets are in upheaval right now, particularly the gas and LNG markets. That has a knock-on effect everywhere around the world, from Japan to Djibouti. What’s happening across the continent is reallocation of gas resources, with prices going through the roof, or projects that were not feasible before suddenly become affordable and financeable. Yet that wasn’t the case 12 months ago. So, there’s a harder look at gas projects and even some oil projects. That doesn’t take away from the renewable space. It’s not an either-or proposition. When we say energy, we often combine things that shouldn’t be combined, right? Fossil fuels, power for cars and jets is different from electricity, electrons. So, there’s no knock-on effect on solar plants, procuring wind power, that’s still charging ahead. But I think what’s happening in Africa is an attention to a little bit of both, you are seeing continued push for solar plants. Now there’s the opening across North Africa of wind power, because there’s a potential to export so much of it up into Europe. But solar continues to be a big push. I think from an engineer’s perspective, delivering solar projects is slightly easier. They’re less expensive, there scale can be a bit more attainable for a utility with smaller balance sheet, compared to a massive LNG to gas to power. My view is renewables will keep its trend; the prices have come down. Now, I think it’s up to African governments to take advantage of these decrease prices for power projects through. I did a panel on this and spoke to some colleagues about procuring power projects and taking advantage of the ability for competition to drive down prices.
TT: That’s brilliant. So, for those new technologies like lithium batteries and hydrogen, are you seeing deals being done in this case? Or is it still pretty much talk?
JP: That’s really hard to answer. Let me take my hat off for a moment and just give you my own personal view. And these are not the views of Hunton. But I think hydrogen might still be a little far away in terms of the technology, producing hydrogen at a point where you can convert electricity and use it to produce the hydrogen. It is costly, and there’s a technological gap that needs to be filled. It is perfectly achievable. Hydrogen will come online. The question is how do we solve the financing for these new technologies that produce hydrogen? And will Africa be the place to resolve the technology issues that introduce funding to new style projects? And then ultimately, the use or export of that hydrogen? I think Egypt is making a clear run at hydrogen. The investments making the joint ventures happen, bringing in the companies that produce hydrogen technology is happening in Egypt. Same thing in Germany. Will this spread across the continent? That’s yet to be seen. But at the minimum, we are seeing a lot of activity and joint ventures as opposed to actual shovels in the ground or hydrogen projects.
TT: From my point of view, I still don’t see Africa becoming a player. I see Africa still being a market. From your point of view, how do we shift it, so that we can also start seeing a lot of local players, we taken advantage of those opportunities that we are talking about?
JP: I want to challenge that a bit. Who uses hydrogen? And for what? There is no market anywhere. It doesn’t exist. We’re creating a technology to solve a different problem. Maybe it’s transport or maybe it’s to produce power. But I think ultimately, it might be long distance transport. Is Africa clued in for that as a market? Or is America? Or is it Japan? Frankly, I don’t know where this market going. Cars might just be the leading place unless we go on electric. So, I bring this to say, I don’t know who’s going to be the market. I don’t know who’s going to be the producer. We don’t know how much it costs to make hydrogen yet. We’ve got some ideas. But right now, it’s pretty, costly. Should Africa be the market for hydrogen? I’m not sure. Let’s see as it rolls out, if there are population densities that can utilize hydrogen, if there are vehicle manufacturers. You told me you had a background in automotive? Are we making cars that run on hydrogen? Or is it just local city buses, and long-distance lorries? I think there’s a lot to be shaken out of this hydrogen market, not least, who makes it? But also, who’s going to use it?
TT: I definitely agree with that. Usually say to people, if you generate energy, but you can’t take it to the end user, it is of no use. There have been some statistics saying that if we need about 30 billion a year for the generation market in Africa, we probably need about the same for transmission, but we don’t hear a lot about it. So, what’s your take on it ?
JP: This is part of the questions that were asked on the panel at AEF (Africa Energy Forum), dealing with and financing transmission projects. Large scale renewables by their definition are often far away. Rooftop renewables are great for powering facilities, buildings and you can put them over parking lots and parking garages. But it’s not enough for baseload large scale generation. So, where would these be placed? If you’re putting up a large solar PV plant, you need 1000s of acres, somewhere far away from the city capital, that’s got to come in connect to the grid. Everyone is excited to build power projects. But in Africa, we’re not seeing a financing or expansion of the transmission grids. One of the reasons is renewable is intermittent. So, you’ve got to bolster the grid and the second reason being the long-distance transmission, you need to get it to the population centers from the location. Why? Where’s the investment? I asked a lot of people at AEF. They are financeable. We’ve seen this in Latin America that individual power lines are financeable. So, why isn’t it happening? This is not a puzzle that needs to be solved. It’s doable.
The gist that we’re getting is that transmission assets and long-distance grids are often owned by the state utility. So, what now we need to talk about is, is the state utility going to turn over one or part of its grand asset to a private developer and pay for that, through funding from the developer? I think it might simply be a changing of minds on how to own and manage a grid, as opposed to some fundamental legal, financial or technical problem. This might simply be coming back to people. Is the government ready to turn over this asset to someone else? I do think it will happen, eventually. That’s just simply because all of the governments that we’ve mentioned here today, are excited about renewable procurement programs, similar to what happened in South Africa. And you’ve seen scaling solar rollout across the continent, feed in tariffs rollout across continent. There’s interest in these procurement programs. The more these happen, the closer you move to a free and open power trading system. You start with IPPS and suddenly, the restrictions start to come down. In 10 years, you’re in an open power market, as opposed to a state power grid. I think it’s on the way, I just don’t think it’s here today. But if anyone’s listening on the government side, we encourage an investigation and consideration into procurement programs. For transmission lines, I think that is a great opportunity to save government’s money and improve service to your citizens.
TT: Would your firm actually take the opportunity to provide thought leadership in this specific issue?
JP: The reason I’m bringing it up is because a really good close friend and partner of mine, Ryan Ketchum wrote a book on this subject. He actually wrote a book on how to fund and finance transmission projects. We’re working on these in Latin America and the Middle East. They’re completely plausible. But because again, this is a labour of love, we want to see that rollout on the continent, because it would help deploy more renewable projects.
TT: We need to talk to Ryan about that.
JP: Yeah. If you want to hear more exciting news about this, talk to Ryan. He is really steeped in the detail of these projects. I think he’d be an interesting conversation.
TT: I would definitely love to talk to him. As we wind up, one other feature at the summit, which I personally enjoy was the Youth Entrepreneurship Summit. The YES Summit. How important is it for us to bring young people into the conversation that we have?
JP: It’s everything because we’re not doing this for our own benefit. We’re both doing this for future generations. I enjoy my practice of law. But I also enjoy bringing up young lawyers, both on the continent, but also part of the African diaspora. Learn from what I’ve been able to develop, grow your own practice to go out and teach others. But you absolutely must be able to transition information, knowledge, education, capacity down to a younger generation. I don’t think I’m part of the older or the younger, I’m somewhere in the middle. Places like Rwanda and Uganda, average ages are incredibly young compared to here in the UK. So, younger people are doing bigger things here in Britain or in some of the Western countries. I think one of the factors as to why I left America was because opportunity to do more as a younger individual. You look at before when I look at jobs, you need to have 15 to 20 years’ experience. No one needs 20 years experience. Five to 10 is fine. If the average age is 18, who are you going to find to do that? So, we need younger people to do bigger things.
TT: Exactly. I think you remind you one of Denzel Washington’s saying that each one teaches one. Clearly that’s what we are saying here. It has been a real pleasure for me to talk to you today. Like I said, unfortunately, we did not meet at AEF but maybe we could be meeting at COP 27.
TT: I really enjoyed having you today. I also wanted to thank you for the time you have taken to have this conversation. I’m sure we’re going to hear more about your firm and especially yourself as well, telling us more on what could be done to further enhance the power sector in Africa. Thank you very much and have a beautiful rest of your day.
JP: It was purely my pleasure. Thank you so much for having me.
TT: Thank you. I appreciate that.