Strategy
A method, and its difficulties
The firm finds technology that already works, invests in it, adapts it until it is operable here, and raises the capital that carries it from a first plant to a programme. Five steps, in the same order.
Thesis
The unproven part
The technologies are proven, though elsewhere, in easier conditions and at a scale that satisfied somebody before us. What remains unproven is whether they will run on a small island: at a price an ordinary household can carry, on a grid that wavers, maintained by people who live within reach of them. That question is very nearly the whole of the strategy, and it is settled on the ground over some years rather than in advance. A company that settles it holds something a larger market would not have given it for years: a whole system running end to end, in a jurisdiction small enough that a single plant is material and that decisions reach the people entitled to take them. That is what makes an island a route to scale and not a detour from one.
The sequence
Five steps, in order
Small island states are not short of visits, studies or pilots. This is the whole arc, and few engagements run all of it: a company may arrive already past the first two steps, or need only the third. What matters is that somebody has seen the whole of it before the first step is taken, and that what stands at the end is a company an infrastructure fund can underwrite without having to take our word for anything — at which point the constraint on its growth stops being capital at all.
FindThe best of its kind, wherever it happens to be
The search begins with the technology and only afterwards with the geography. What we look for is a company among the best of its kind somewhere in the world — a desalination train, a gasifier, a materials process, a microgrid controller — proven in service rather than in a laboratory, and staffed by engineers who can describe the failure modes as fluently as the successes. Most are startups and scaleups: the technology has to work, but the company need not yet be large. Novelty by itself recommends very little; a machine that has survived a decade of maintenance recommends a good deal more.
AdaptMaking it work in an island setting
Almost nothing arrives island-ready. Salt, heat, freight, an intermittent grid and a maintenance crew of three will between them find every weakness that a temperate pilot did not. The redesign that follows is largely unglamorous: spare parts that can be held on the island, tooling a local workshop already owns, procedures written to be followed at three in the morning by somebody tired. Whether a plant is still running in its seventh year is mostly settled here, which is some argument against the habit of skipping the step.
OpenChannels to government, and to capital of another order
A ministry, a utility, a regulator, a development bank and an infrastructure fund each move at their own pace and answer to different people. The firm invests first and raises the rest: development finance, co-investors, and debt once there is a record to lend against. The introductions are therefore made early, in person, and well before anything requires signature, so that by the time a project reaches permitting or wants a co-investor the relationship is some years old. The larger part of the work, though, is not introduction but translation: an infrastructure fund cannot underwrite what it is unable to read, and what makes a company readable is an operating record, a defensible offtake and a settled regulatory position. For a technology company this is ordinarily the part that cannot be managed alone.
StructureResourced, from the first day, to be repeated
A first plant built as a one-off leads nowhere in particular, however well it runs. What we look for is the version that can be built again on the next island: standard equipment, documented operations, local hiring and training from the outset, and a structure able to carry a second and a third project without being rebuilt for the purpose. Designed in at the start, that costs a little more, once. Retrofitted afterwards, it has been known to cost the project.
ShareA benefit for every party at the table
The technology company acquires a reference site, an operating record and, with them, the standing to be financed by institutions it could not otherwise have approached, after which the pace at which it grows becomes a question for the market. The government acquires infrastructure it did not have to build. The community acquires water that is safe, power that holds, waste that becomes something useful, and skilled work that does not require leaving home. The firm holds its own position and compounds it, each completed project making the next cheaper to originate and easier to finance; what it takes varies with what it put in, and is agreed at the outset. Where one of the four is absent, the arrangement is unlikely to survive the decades it was drawn up for.
What these places want is seldom capital, or ideas, or goodwill. It is somebody still present at step four.
Capital
Four kinds of capital
Money is the most easily raised of the four and, by itself, the least decisive. The firm commits its own and brings the other three with it, which is what makes the money work. What gets a plant built in a place with no precedent for one is the combination: put all four on the same project and each carries the others further than any would go alone. They do not so much add as react.
Intellectual
Engineering that has already been tested against the world, together with the licences, data and operating knowledge attached to it. Difficult to originate, and inexpensive to move once held.
Human
The engineers, operators and apprentices who will run the plant for the next twenty years. So far as it can be arranged, they should live within an hour of it.
Social
Standing with a ministry, a utility, a lender, a village council. Slow to accumulate, quickly lost, and not for sale at any price.
Environmental
The reef, the aquifer, the soil and the air on which a project draws. Counted as capital they appear as assets; counted as free they tend to reappear, later, as liabilities.
Something nearer chemistry
The long view
The state in which it is left
The test is whether a place is left with cleaner water, steadier power, less waste and more skilled work than it had, and measurably better for the firm's having been there than it would otherwise have been. It is not an easy test to pass, and we would sooner be judged against it in twenty years than against anything we might claim today.