Shaking up AmCham

Entrevista de António Martins da Costa à Revista Essential Business

Shaking up AmCham to bring added value to members

As an executive board member of Portugal’s energy giant EDP (Energias de Portugal) and the first chairman and CEO of EDP Renewables in the United States, António Martins da Costa is now using his experience to boost US-Portugal trade and investment and streamline the American Chamber of Commerce in Portugal (AmCham).

Text and photos: Chris Graeme

From June this year, António Martins da Costa has taken the helm at the American Chamber of Commerce in Portugal as president of the organisation which has been promoting Portuguese-US business since 1951.

Martins da Costa has a wealth of experience to back up his business credentials. He is an invited lecturer at Lisbon’s Nova School of Business and Economics, a board member on BCSD Portugal – Business Council for Sustainable Development, a representative member of the World Business Council for Sustainable Development and 10 years ago was the chairman and CEO of EDP Renewables North America (Horizon Wind Energy).

For the previous three years, he had been the vice-president of AmCham, which, he says, gave him ample opportunity to understand the institution and its long history in Portugal and the kind of challenges and problems the chamber is facing today.

One of the main challenges, he says, is offering added value to potential and current members, providing an efficient and technology-driven digital platform and comprehensive network resource.

Martins da Costa says it made sense to get involved with AmCham given his role as an EDP executive board member and the fact that the energy giant is the ‘number one’ Portuguese investor in the United States through its listed subsidiary EDP Renewables (EDPR).

This relationship with the US, he says, “touches him deeply”, but besides the emotional and historic links between the two countries, the thriving business between the two is the “glue that binds both nations together”.

In fact, after the European Union, the US is Portugal´s main market worldwide,partly because of the continued efforts by AmCham working on behalf of US and Portuguese companies, and because of the worlk done by the Portugal-US Chamber of Commerce in New York since 1979.

Furthermore, over the past 60 years, Portuguese governments have nurtured the relationship, understanding that the business links with the US are key to Portugal’s development.

“Sometimes there may be misunderstandings between two points of view, but overall there is an excellent alignment of interests while American investors and commercial traders have been looking at Portugal in a different light more recently than they had in the past,” says Martins da Costa.

This, he says, was even more evident after the Troika period. “During the crisis, US investors shied away and saw the country as an investment risk so the cost of capital and required return were higher than in the past.”

Martins da Costa says that now the perception is changing, and the US is looking at Portugal as a country that has done most of the reforms that were needed.

Starting his three-year tenure at AmCham, he says he aims to position the chamber as a real platform for Portuguese and US companies and corporations.

“When we look at the Portuguese potential, both trading companies and investors, we need to offer a value-added service, otherwise why would you bother becoming a member of the chamber?”

These value-added services are: providing information about the markets, promoting events on finding and making contacts, and attracting politicians, businessmen, academics, researchers, experts and CEOs from the US to share their experiences with the chamber’s members and associates. This means making the most of opportunities when notable US figures are in Europe and suggesting a stop-over in Lisbon.

To achieve all this, Martins da Costa says AmCham needs to change the communication strategy it used in the past through technology.

“We have budgetary limitations, so I’ve launched a challenge to the board members that if each one of us deploy two or three people from our companies to set aside a few hours to work with AmCham that would help,” he says.

“There are 20 board members, and I have provided three people from EDP to give up their time and work pro-bono for AmCham. If everybody at AmCham gives up a little of their time or provides some staff with expertise in different areas, we can really begin to change the chamber and provide an effective platform that brings added value to its members.”

Portuguese startups turn to US capital 

António Martins da Costa says that the world is changing, and that the US and Europe are more aligned in thinking. But Portugal lacks homegrown investment and depends on foreign direct investment to help its new technologically-driven companies grow.

“Venture capital is critical, but we need to change mindsets, and this is why so many Portuguese companies are having to look for their growth investment capital in the US,” he says. 

“If you compare the US and equity versus fixed-income bonds, the ratio is typically 80/20. In Europe, it is the other way around. Most asset managers and investors buy bonds because they want lower risk.”

In the US, there is more appetite for risk. “If you ask graduates at a US business school what they want to be, 70-80% want to be entrepreneurs. In Europe, the share is lower because people are risk-adverse and prefer to work in big organisations and investment banks,” he explains.

One example of a successful Portuguese unicorn working with EDP that initially started expanding with US venture capital is OutSystems. “It’s CEO, Paulo Rosado, prefers to be in the US because it is where the capital flows and clients are, although he has some clients here in Portugal; EDP is one of them where OutSystems is creating a Competence Centre within the company,” he says. 

In providing capital investment for startups, big corporations play a part, too. EDP has a subsidiary called EDP Ventures, which invests around €40 million in startups specialising in sectors that are allied to its own activity areas and R&D projects in renewable energy and smart grids and customer service technology-based solutions.

An increasing emphasis on renewables

For two years, Martins da Costa headed EDP’s subsidiary company EDP Renewables in Houston, Texas, which has invested over US$6 billion in the US market since it started its renewable energy operations in 2007 and where he was the first company chairman.

“EDP has a roadmap to 2050 in the renewables sphere and commitments to comply with the Sustainable Development Goals (SDGs) launched by the UN. We aim to be carbon neutral by 2050 while, in the short term, we have announced that 75% of our power generation will be CO2-free by 2022,” says Martins da Costa.

EDP’s growth today comes from renewables. The company is not investing anymore in fossil fuel technology. By 2030, the company will abandon coal-fired power stations (it still has three: in Portugal, Spain and Brazil). In addition, it has conventional renewable hydro-generation, distribution grids and retail supply.

“Our growth is mainly in the US, which represents over half of EDP’s renewable energy portfolio. In all, the company has renewable energy operations and projects in 13 countries including Brazil, Canada, Mexico, Portugal, Spain, France, Italy, Poland, Romania, Greece and is now looking at Massachusetts in the US.

EDPR has also signed a strategic Memorandum of Understanding (MoU) to create a co-controlled 50/50 partnership with the French energy company ENGIE in fixed and floating offshore wind with projects to be developed between now and 2025.

This follows EDPR and ENGIE’s six-year cooperation as consortium partners in the Dieppe Le Tréport and Yeu-Noirmoutier fixed offshore wind projects in France and Moray East and Moray West in the UK.

“This partnership with ENGIE is important because offshore wind investments are much more CAPEX investment intensive than onshore wind. Each megawatt you have offshore is three times more costly than onshore,” says Martins da Costa.

Portugal will have its first floating wind farm by the end of this year, which will also be one of the largest in the world. It began with a pilot project in 2011 in partnership with Inovcapital and Principle Power, with the first floating wind tower in the country located off the coast of Aguçadoura near Póvoa de Varzim.

However, as Martins da Costa says, “business in Portugal – 40% of the total business – will diminish, not because we are selling but because we are growing more in other geographies.”

The success of the project, called WindFloat 1, paved the way for the construction of the current project which is being completed 20km off the coast of Portugal, near Viana do Castelo. Dubbed WindFloat Atlantic, it involves a partnership with EDP Renewables, Repsol and Principle Power, and €60 million funding from the European Investment Bank.

China Three Gorges 

A year ago, Chinese state-owned energy company China Three Gorges launched a Public Acquisition Offer for EDP which raised eyebrows in Washington.

The project consisted of two things: one was the price for the shares, the other a project for the future development of the company if they had gained control of EDP.

“The project they announced seemed reasonable, but the details were vague and the offer price too low.”

Martins da Costa rules out ideas that the EDP board voted down the offer on the grounds of US government pressure. “We are completely neutral in terms of this kind of political issues. We have many shareholders from different nations (China, Spain, the United Arab Emirates, Algeria, Qatar, the UK and US). We cannot run a company in favour of the Chinese or Americans. We have to do what is best for EDP – its clients, staff and shareholders.”