Emerging Market Risks


January 20, 2013

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It’s a long way from here to Timbuktu.

However, for a place famed for it’s extreme inaccessibility, it’s a city that’s felt much closer to home of late, following the French air attacks in Mali and as Islamists subsequently flee the ancient city following a nine-month hostile rule.

But here’s the thing. Previously remote cities like this may well be cropping up on your agenda a little more often in the future. Particularly if the expansion into emerging markets continues at its current pace.

And while that’s potentially good news for the air miles and indeed for the multitude of disparate local economies on the travel itinerary, it brings with it a whole host of new challenges.

Take for instance, the recent grim developments at Nigeria’s biggest wind farm. As the team reported earlier in the month, on 19th December, a wind engineer from Vergnet Group was kidnapped in Rimi, in the north.

Although it wasn’t at first clear of the precise circumstances of the event, the Islamist group Ansaru claimed responsibility for the abduction, in which 63 year-old Francis Colump was captured by a reported 30 gunmen. Yes, thirty.

Francis was in the midst of installing a 10MW power project in Katsina and the kidnappers continue to hold the man; claiming that the action has been taken in response to French military action in the region.

All in all it’s a terrible chain of events. And worse still, it’s probably only just the start.

Indeed, as the oil and gas corporations already know all too well, these sorts of occurrences have become increasingly commonplace for engineers and senior personnel working within emerging economies.

And while the rewards from a successful energy initiative can be significant, such ventures are not without a substantial chunk of risk.

It’s precisely why so many of the renewable energy firms that have already been working extensively throughout the Middle East have been doing so with a fair degree of caution.

Since while the Arab Spring has brought with it substantial opportunity, the revolutionary wave of demonstrations and protests can’t easily be dismissed.

That’s not to say that everyone should retreat to the comfort of domestic markets of course. Rather, it’s a timely reminder that while margins can sometimes seem significant, the true cost is often far more difficult to measure.

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