Jiefang Daily: Chinese Enterprise Explores Sustainable Development Overseas

The tiny Mediterranean island of Malta is well-known for its unique geographic location and beautiful scenery, which attracts tens of thousands of tourists from around the world every year. Nevertheless, Malta, which relies on tourism as its pillar industry, is facing a dilemma between economic development and environmental protection.


As China is further deepening cooperation with countries involved in the Belt and Road Initiative, SEP, a major subsidiary of SPIC, has focused its attention on the island country. Instead of simple capital export, the company is committed to creating the most fundamental conditions for local economic and social development through its advantages in management experience, capital and technology. Meanwhile, the Chinese enterprise is actively exploring international operation mode during cooperation, and enhancing its sustainable operation capacity in risk management, localized operation, brand building and corporate social responsibility execution comprehensively, in order to achieve multi-win in terms of economy, society and environment eventually and effectively address the development challenges faced by the local region. Hence, the Chinese enterprise has provided an operable practice for the subject of sustainable development, i.e., ensuring economic benefit while making a more responsible investment for environment and development of human society.


SEP (Malta) Holding Ltd. (SEPM) was founded as a wholly-owned subsidiary of SEP on November 26, 2014. Through a flattened overall operation mechanism, the company pushed forward four projects located in Malta in a synergistic manner: it acquired 33.3 percent shares of Enemalta PLC, Malta's only state-owned energy company, helped the latter realize transformation and win positive ratings by S&P for five times continuously; it also invested 150 million euros for the acquisition of 90 percent stake of Delimara 3, a major power plant in Malta; it established International Renewable Energy Development Ltd(IREDL) jointly with Enemalta to develop renewable energy projects in Malta and on the continent of Europe; through equity participation in International Energy Service Center, SEPM provides professional electricity O&M services centering on Malta while expanding to the surrounding market gradually in order to realize coordinated development.


Nowadays, SEPM has initially formed a "three-step" development strategy with the objective of "value creation, talent training and demonstration effect".


Marsaxlokk, located in the southeast of Malta, is a popular tourist resort on the island. As a traditional fishing village, it attracts many travelers with the fishing boats berthing in the bay, the Sunday fish market and the seaside restaurants. Delimara power station, also located here as an import power source for the whole island, becomes a unique part in such a beautiful landscape painting. D3 Power Plant within the site of Delimara power station had just eight heavy oil-fired power generation units at the beginning of construction, with annual power generation capacity of 136.8 MW only. At that time, the power supply of Malta relied mainly on the submarine cable, which was highly susceptible to the environmental impact, and thus the island country often suffered from power outages due to frequent technical faults. In 2014, the annual average time of power outage was 9.69 hours for Maltese consumers.


Stevo Mandic, who come from Serbia, has fallen in love with Malta since he travelled here as a tourist ten years before. As the Maltese economy has been growing robustly in recent years, he came back again in 2016, and was employed by SEPM as the supervisor in charge of contract and procurement at D3 Power Plant. Mandic recalled that the stacks of D3 Power Plant kept spewing black smoke when he came here before, which made local residents and tourists stay far way for fear of pollution.


When he joined D3 Power Plant, an oil-to-gas conversion project was under way there, with the original heavy oil-fired units transformed to dual-fuel type units using natural gas and light oil. Thanks to the conversion project, the island country had its first natural gas-fired unit. Besides retrofitting on the internal combustion system, the flue gas system had been upgraded along with waste collection from the sea water. After the conversion, various environmental indicators of the units became superior to the level required by the local government, and hence the power plant obtained the ISO14001 certificate. Moreover, the power plant is now able to meet the dispatching needs of the power grid rapidly, which ensures the stable supply of electricity to a great extent during the summer peak season especially. In 2017, the average power outage time of Maltese users decreased to 0.44 hours, with the optimization rate reaching 90 percent.


In the meantime, SEPM is developing a series of wind power and solar power projects jointly with its local partner Enemalta aimed at completing a total capacity of 300 MW on and outside the island of Malta in the coming five years. Among them, Marsa Roof-mounted Distributed PV Power Project, the first PV power demonstration project on the island of Malta, realized commercial operation with full capacity in the end of 2017. The two companies have also joined hands to develop projects overseas, taking the continent of Europe as the first step, with Mozura Wind Power Project in Montenegro expected to go into operation by the end of 2018. Among the first batch of countries with positive response to the Belt and Road Initiative, Serbia and the Balkan region, where the former is located, is the key area for SEPM's project development in the next phase. 


SEPM knows that it cannot improve the energy situation of host country merely by project development. Only through cooperation with local enterprises, fundamental improvement of infrastructure and realization of energy structure transformation, the company will be able to achieve mutual benefit, win-win result and sustainable development eventually.


As the Malta's only state-owned power company engaged in generation, transmission, distribution and retail, Enemalta had been confronted with a number of problems such as redundant personnel, aging of most units and weak infrastructure before the transformation. After investing 100 million euros to acquire 33.3 percent shares of Enemalta, SEPM assigned several senior executives to the company and participated in its daily operation. Thanks to the injection of capital and management experience, Enemalta was able to turn around and realize successful transformation eventually with the reliability, stability and safety of the power grid enhanced substantially. Following sustained improvement in its financial performance, Enemalta's corporate rating was also upgraded. Through optimization of local energy structure, the residential power tariff in Malta was reduced by 25 percent, and the country's sovereign rating was upgraded to "A+" for the first time in 20 years.


The development achievement of SEPM has won applause from both China and Malta. The company was praised by Maltese Prime Minister as "a win-win model of economic and trade cooperation between Malta and China", and was awarded the title of "advanced collective" by SEP in 2015. SEP's Malta project was selected as an excellent case of "going global" by State-owned Assets Supervision and Administration Commission (SASAC) in 2016 while the company was granted the title of "advanced collective" by SPIC. Besides, SEPM was considered as "small investment but big influence, small scale but big potential, late comer with good experience" by Xiong Weiping, Chairman of the Supervisory Board for Key Large State-owned Enterprises. In 2017, "Optimization of Maltese Energy Structure by SEP" was included as a classic case in the Overseas Sustainable Development Report of Chinese Enterprises in 2017 jointly released by the United Nations Development Programme, Ministry of Commerce of China and SASAC.


In May 2017, SEP Chairman Wang Yundan was invited to attend the EU Energy Ministers' Summit held in Malta, and delivered a keynote speech titled "Optimizing Energy in Malta, Realizing Strategic Goal in Europe", stressing that the success of SEP's Malta project depends on the implementation of the Belt and Road Initiative, outstanding partner and objective of win-win cooperation with mutual benefit. If the smooth operation of SEP's Malta project is attributed to favorable timing and geographical position, it is unity and coordination of people that contributes to the sustainable development of the project.


SEPM has been actively involved in the local community and making friends extensively. D3 Power Plant invites Maltese college students to visit its production site on a regular basis, and introduces related knowledge on power generation and gas-fire power plant to them. In order to protect local environment, the company's senior executives led Chinese and foreign staff to the sea area where the project is located to collect marine litter and help preserve local wetland. Meanwhile, the company has been undertaking the social responsibility of culture communication positively, e.g. organizing the theme activity of "Chinese Culture Night" in the local community, assisting in holding "Children Drawing Competition" in Malta for three consecutive years, which has impressed local residents greatly and been widely acclaimed by all sectors of society.


The company's development has also gained support from local Chinese organization and enterprises. In April 2017, the Maltese-Chinese Chamber of Commerce, of which SEPM was chosen as the chairman company, was founded officially, and has since then been pooling the efforts of Chinese enterprises and developing communication and cooperation with local enterprises actively. To further strengthen cooperation, SEPM signed a strategic cooperation framework agreement with China Cultural Center in Malta, marking the first strategic cooperation agreement signed between overseas China Cultural Center and Chinese enterprise.


SEPM has an international team, with its 44 employees from seven countries including China, Malta, Serbia, Macedonia, Portugal, Greece and Pakistan. After years of overseas operation, the company has established the core values featured with "trust, struggle, passion and innovation", and developed the "family culture" which made its staff from various background stick together. On the first day of every year, the company's general manager Sheng Baojie would pay a visit to the holding companies and stock participating companies together with the management team and extend New Year greetings to everyone. No matter on Chinese and foreign festivals or birthdays of the staff, everybody on the team could share and feel the warmth and joy with the company, bringing them closer to each other. 


SEPM also paid special attention to the staff training. Before the first gas-fired generation unit of D3 Power Plant was connected to the grid, the whole island of Malta was lack of experience in managing gas-fired power plant. Therefore, D3 Power Plant signed an agreement with the manufacturer of gas-fired units in order to strengthen the relevant knowledge training for management and O&M personnel. Moreover, all the company staff and visitors are required to receive safety education on gas-fired power plant.


In addition to enhancing English communication ability of Chinese staff, SEPM also provides Chinese courses for those foreign employees interested in the language, some of whom are preparing for Chinese Proficiency Test after a period of learning. Meanwhile, the company assigns foreign staff to visit the power plants in China regularly so as to learn from SEP's production and management experience. The foreign staff of SEPM have won recognition from SPIC for their professionalism and endeavors, and two Maltese engineers among them have been granted the title of "Top 10 Outstanding Strivers" by SPIC for two consecutive years.

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