ECUADOR - Green Economy
Country Manager, BYD
Jorge Burbano was appointed to his current position in July 2016, along with the establishment of BYD in Ecuador. Prior to this, he was the undersecretary for climate change at the Ministry of Environment. He has a bachelor’s in commerce from the Netherlands and a master’s in business and management from the University of Plymouth.
BYD focuses its economic activities on four main areas: electronics; energy storage; solar panels and LED light; and transport, including electric vehicles, monorails, and a small segment for gasoline-powered cars. BYD is a multinational company specializing in eco-efficient technology. The largest electric bus production factory in the US is BYD’s located close to Los Angeles, and we have other factories in Brazil, Hungary, and France. We place quality before price. We also have country managers in many countries in Latin America. In 2016, BYD decided to come to Ecuador because it saw potential in three areas. 90% of electricity comes from hydropower, and if we add electric vehicles, we will complete the entire green cycle. The country has high subsidies for fossil fuels; however, these are not sustainable. Ecuador was one of the most advanced countries in terms of providing incentives for electric mobility in Latin America. For example, there were no taxes on electric vehicles, 0% VAT and customs, and special prices to charge these vehicles.
The city of Loja issued a regulation that stated all new taxis in the city had to be electric. We started with 35 units that would be distributed by public tender. We gained significant recognition for this, and people realized this technology is feasible for Ecuador. We then moved on to the buses in Guayaquil, which were especially designed for Ecuador. That was the initiative of a small urban transport company but was extremely visionary. We now have 20 buses for Guayaquil. This encouraged policymakers, and they started to create new policies. We have signed an MoU with the national government. We want to create a factory here; however, we need a sustainable demand. BYD requested 300 buses per year to set up the factory. Demand of conventional buses is 1,500-1,900 per year, so it is about 20% of the total demand in the country. We established a roadmap with the ministry of production to determine what is needed to achieve sustainability, such as 0% VAT and 0% customs for electric buses. We also made a commitment to work with universities to get human resources and technology transfers and to bring buses for test drives.
Our cars have 400-km range, and we need 28 fast chargers to cover the main cities. We already have experience with the taxi chargers in Loja, so we know what we need. Even if electricity rates are low, the stations are not profitable right now because we have a small fleet; it will be a business if we have a larger fleet. That is why there should be a national strategy to include this; the promotion of both vehicles and stations should be done at the same time. The total benefit for electric buses is savings plus revenue from electricity usage. For example, in 15 years these 3,000 buses mean a benefit of USD832 million, including the energy sales. We are a dollarized country, so we cannot print our money. Our production capacity is 300 buses per year, 300 direct jobs, a direct investment of USD60 million, and a long-term investment of USD300 million for the factory. It can be scaled up for the production of electric trucks. Another issue is that in Ecuador, if a company has a credit line that is 100% more than its assets, it has to present a guarantee of 120%. For the past project in Guayaquil, the operator has assets for USD100,000, and the project is USD8.5 million, so it needed to present a guarantee of USD11 million. A local operator is not able to provide such collateral.
ECUADOR - Real Estate & Construction
General Manager, Uribe & Schwarzkopf (US)
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