Rebecca Mark

   As in many sectors, three types of businesses often seem to emerge naturally: those that create, those that own, and those that operate. On the international asset side, Enron emphasizes creating new assets. In fact, nearly 100% of Enron's international efforts focus on creating new assets. Ms. Rebecca Mark, now CEO Azurix, Enron's water company, but at the time of her interview with World Cogeneration in 1996, CEO of Enron Development Corp., has played an essential role in Enron's success. She had applied native intelligence, shrewd timing and a desire to win to become a financial leader in the power development field.

   After attending Baylor University and in 1977, earning a Masters in International Management, she trained at the former First City National Bank. For the next six years, she honed her skills and broadened her contacts by specializing in commercial lending to energy companies. Using primarily private finance, she funded major projects such as refineries, pipelines, and other asset based finance.

    Enron's predecessor companies recognized a valuable contributor and she joined one of them as Assistant Treasurer. After the larger Enron was formed in 1985, she joined, as CFO, the startup team for the power business. When Enron sold half the power company to Dominion Resources in 1987, she took advantage of the situation and enrolled at the Harvard Business School while continuing her work at the company. By 1989 she had rejoined Enron full-time and reentered familiar territory, the power business, and took over the development side of the business. In 1991, she and a few others started the development company. It has responsibility within Enron for power, pipelines, liquefied natural gas and all the other development activity on the asset side of Enron's international business--a parcel of work that has provided many challenges for Mark.

    "There are many things that both developers and local institutions must do: hoops must be jumped through, approvals and permits obtained according to the letter of the law. These details become very complicated to understand especially on the part of the bureaucracy that deals with them and on the part of the public that observes them and wonders what is happening. Enron has a history of being active in most countries where this process is taking place in the very early stages in the privatization process."

    Ms. Mark points out that "The future plant mix depends on what markets you are focused on and opportunities for most plant sizes are everywhere. The tendency for most international developers is to focus on plants between 10 and 500MWs, a fairly large range. Many plants are in the 100MW range where Enron has several. The ideal power plant size fundamentally depends on the scale of the market and its requirements."

    "Who are the developers of the smaller projects? Many of the smaller projects are being done by local developers or local consortiums. Equity money and some local debt have funded many of them; quite often these projects require much less permitting and capital raising. Unfortunately, she says that "There really are not that many international developers that are succeeding in that size range. Small firms lack the necessary supporting corporate infrastructure and the development costs are quite high."

    She observes though that "most firms do not undertake the large scale projects of 500MW and up. Few firms, Enron among them, have sufficient financial and engineering resources to develop plants of this size. In a country like India or China where there are huge infrastructure requirements and getting fuel is difficult no matter what your fuel source is whether it is coal, gas or oil, where the infrastructure has yet to develop fully so as to support the project, where permitting and approval process is lengthy and difficult ? all of those things lead you to construct larger projects. The upfront development expenditures, having access to capital having the knowledge base that it takes to do the work drives the business toward the larger developers.

    As in many situations, the infrastructure development costs for 100MW plant are essentially the same for a 500MW plant. Thus, the tendency for companies in Enron's class is to focus on large plants."

    Ms. Mark, as might be expected, is increasingly bullish on Enron's position in the business. She confidently states that "Enron has one of the strongest portfolios of projects in financing with seven plants in construction and six in operations. The portfolio of projects currently in financing and coming into financing are the strongest I have ever seen. Enron, or any other company, could not ask for stronger portfolio power projects."