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AutoGas Joao Das Neves

MOZAMBIQUE - Energy & Mining

João das Neves

CEO, AutoGás

Bio

João das Neves is a Mechanical Engineer who was born and grown in Mozambique. He has worked for more than 35 years in the private sector in the automobile industry, tourism and real state development.
He managed a leading car distributor in Mozambique for brands such as Ford, Mitsubishi, MAN Truck and Buses, etc for more then 12 years. He has traveled extensivelly for over 36 countries and has organized and attended many conferences, events and other projects. During the last 15 years he has been devoted to implementing from scratch the Natural Gas for Vehicles in Mozambique – as Executive Manager of Autogas- a successful project in the Natural Gas sector in Mozambique.

"The availability of gas in the northern triangle, Nacala, Nampula, and Pemba, is of considerable interest."
TBY talks to João das Neves, CEO of AutoGás, about natural gas, expansion plans, and goals for 2024.
In 2020, Autogas expressed their desire to create an opportunity for people to transition to gas at lower cost. Can you provide an update on the progress of this initiative and highlight any recent company achievements?

The company is growing gradually, albeit steadily. Since then, we have overcome public skepticism over changing to gas. They had concerns about it being an unsafe source of fuel. Over time, we managed to convince people and, by experience, provide evidence that gas was safer than other fuels. Today, the economy is facing a major challenge, and many people are beginning to change to gas. Therefore, we increase the number of stations, and also the number of vehicles running on gas. In addition, one of the biggest challenges in this business is investment. Yet, we have managed to sign strategic partnerships with an experienced internationl company who is converting thousands vehicles a year and running more than 80 gas fueling stations in Africa and that has allowed us to increase the company’s capital among other benefits. We are ultimately growing the network of stations. Meanwhile, the energy transition agenda is assisting the shift from petrol to alternative sources, including electricity, in the case of Mozambique.

Autogas is the pioneer of this new mindset in the country. How did you manage to bring awareness to the Mozambican population about the benefits of gas?

You need to believe in this to be successful. You need to be proud of what you do and understand that this has an impact on the country, and recognize your role in helping this happen. Once you start going down that road you don’t look back, but work until you achieve your objectives. The biggest challenge is the fact that in markets such as Mozambique, there are no grants or government support to stimulate the growth of businesses like ours. In other countries, there are often environmental funds available and importing tax exemptions and other incentives on items that serves the country going GREEN In the case of Mozambique, we are talking about a 100% private initiative. And to start from zero with a new concept is quite a challenge.

In 2023, Autogas had 3,500 cars fueled by natural gas in circulation. Can you tell us about the project and the challenges you faced?

One of the biggest challenges of this project was the cost of conversion because most cars running in Mozambique are second-hand and imported from Dubai, Japan, and elsewhere. The cost of the car is relatively low because people buy a second-end car that costs USD3,000-4,000, while the gas conversion costs USD1,500—a large percentage of the purchase price. Very few people can afford this, having already made a big effort to buy the car. For many years, many people have been interested in converting their car, but simply could not afford to. One of the things that we eventually managed to do is subsidize the cost of the conversion to half the price. It is a cost that we pay today, but as more people are consuming gas, we hope it will turn a profit in a medium to long term. Secondly, we have opened new stations. We are doubling the capacity of the existing stations because last year the number of users increased drastically. In Maputo, we are looking to open two new stations this year. Then in 2025, there will be more stations along the EN1. We also brought on board the latest technology and the latest conversion kits made in Italy and provided our technical team with a high-level technical training. Meanwhile, in 2024 we have also introduced diesel conversion because in the past we were only focused inconverting petrol to gas, due to the lower costs involved. Diesel conversion is somewhat more complex and therefore costly.

Autogas is planning to construct 70 filling stations and convert 60,000 vehicles nationwide over the coming 20 years. What initiatives are taken into consideration to reach these numbers?

We firmly believe that that is the way forward. Seventy stations, is the potential market. The main challenge is the source of the gas and secondly the availability of funding. When you open a new station, what happens is that the fleet that is now using other stations will dilute and move from older stations to the newer one. In the long term, public confidence increases and more people join, and so on. Therefore, this will be a gradually-achieved project. We are starting to export gas from the north, but it is offshore, and onshore, we currently lack the necessary infrastructure to exploit existing resources. Once we have infrastructure on the ground in the north, we can eventually pursue grow in the southern market. This process will likely occur within the next five years. The availability of gas in the northern triangle, Nacala, Nampula, and Pemba, is of considerable interest. Yet, while many companies are keen to approach us and see what we can do to convert their fleets to gas, we do not have available gas there. So, until Nacala has an LNG terminal, the process remains difficult. Compounding the problem, existing fleets in Nacala do not justify an LNG terminal. Thus, additional consumers are needed to reverse the situation. Therefore, this is what we are looking to achieve—to stimulate other players to become involved. And once they are all onboard, it will make sense.

What are your objectives for 2024?

This year, we are concentrating on the conversions in greater Maputo where the majority of vehicles in Mozambique are concentrated. 63% of the fleet is in the south, and 27% is spread throughout the rest of the country. We will also gradually start moving north towards Nassoro. This year we have an ambitious plan to convert 1,000 vehicles, and are making all efforts to achieve this by subsidizing the cost of conversion and upping our marketing activity. Rather than relying on traditional marketing we intend to involve local opinion leaders and influences. A number of welcome experiences in this approach have boosted our enthusiasm. We have also launched a video campaign on social networks.

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