ESCO Roundtable Borderless Prospectus v7 PDF

Wednesday 27th May 12:00 BST | 13:00 CEST/SAST | 16:30 IST
ESCO Roundtable Borderless

A Digital TowerXchange Event – Don’t lose touch with your peers
A digital roundtable to discuss how ESCOs are positively impacting efficiency, service quality,
environment and community
Cover image courtesy of Camusat
To discuss your participation, contact Sarah Kerr on +44 7714 775700 or email skerr@towerxchange.com
Co Sponsor: Organised by:

Lead Sponsors: Co-host:
1 | ESCO Roundtable Borderless | Wednesday 27th May 12:00 BST | 13:00 CEST/SAST | 16:30 IST | www.towerxchange.com
Tower Xchange
What is the ESCO Roundtable Borderless?
Engaging the entire ESCO ecosystem
A virtual roundtable including presentations
by key stakeholders, discussions by ESCOs and B2B and B2C IPPs
MNOs and digitally facilitated networking. EAAS EAAS Towercos EAAS MNOs
Our goals: Source: TowerXchange
EAAS
EAAS
Community
power Micro
Investors
< Create a digital meeting place to keep the industry grids
Solar lanterns
connected while global travel is restricted, Cleantech
including digital networking Retail outlets Technology Aggregator
Solar Utilities, O&G
< Increase understanding of the ESCO business farms agnostic ESCOs ESCOs
Phone charging
model, accelerate adoption by MNOs and towercos, Infrastructure
with the goal of scaling ESCOs faster Schools funds
< Share information on the successes of already Wind

Data centres Private equity
farms Powercubes
ESCOS Powercubes
active ESCOs, and the pipeline of upcoming ESCO Fibre PoPs In-house
O&M
opportunities from MNOs Commercial &
Development
Energy system components
< Create enduring content on the ESCO sector through industrial off- Small Batteries Gensets
takers 3rd
a post-event report to be published in June biomass Fuel cells
party Installation Capacitors
Solar
Wind
and
< Evangelise the ESCO model to prospective investors, Agricultural off- O&M & service Controllers Biomass
hydro
thereby attracting more funding at lower cost, with takers Inverters Bank debt
plants
Air
a view to deepening the pool of viable prospective Feed-in-tariff to
conditioning
Export credit
ESCO partners grid? agencies
Data collection and utilisation
Why should you register for the ESCO Roundtable Borderless
Join our sessions from you home office or living room An exclusive update from Orange, the ESCO trailblazer
Digitally network with peers through a dedicated networking tool Hear direct from ESCOs on their latest successes
Hear the latest ESCO market update from TowerXchange Understand the upcoming pipeline of ESCO deals
The Energy Services Company (ESCO) business
model achieves launch velocity
IPT pioneers guaranteed savings model Ethio Telecom RFP for an initial 1,200 sites
for IHS Nigeria nears conclusion
Energy Vision operates Africa’s first ESCO

for Airtel Gabon AST scales to 10,000 sites, Ardom improves
margins through Indian market turbulence
Millicom Chad partners with Aktivco

ESCO opportunities in Pakistan, Philippines
and LatAm
Orange activates 10 year ESCO partnerships in six
countries, three more imminent
Sagemcom adds ESCO contracts with Orange
Sierra Leone and Liberia to DRC
IPT provides ESCO for Alfa and touch in Lebanon
Etisalat to launch 1,000 site RFP in Egypt

DPA powers 1,800 Econet sites, expands into C&I
Vodacom South Africa launches ESCO RFP

Yoma Micro Power, Voltalia and Yoma Mandalay for 1,400 sites
power hundreds of cell sites in Myanmar
Orange reports uptime ratio improvements Safaricom preparing ESCO RFP

of 30-40%
ieng contracts over 700 ESCO sites across CAR, MTN has 13,000 potential ESCO sites
Guinea C, Liberia and Afghanistan
ESCOs operate power systems at >20% of Africa’s unreliable grid and off-grid cell sites, rising >50% by
2021, while a next generation of ESCOs can ease financial pressure on Asian MNOs and towercos
ESCO Roundtable Borderless
Wednesday 27th May 12:00 BST | 13:00 CEST/SAST | 16:30 IST
ESCO Borderless is our digital roundtable and special report brand, which brings together the ESCO, MNO, supplier and investor
ecosystems to share information and network. The ESCO Roundtable Borderless will combine discussions and digitally facilitated Q&A
sessions. Networking will be encouraged through a dedicated meeting app and through individual introductions, for those who want to
take conversations offline. The ESCO Borderless Report will follow in June.
Part one: Introduction to ESCOs by TowerXchange and Orange < What is the case for ESCOs to manage on-grid as well as off grid /
bad grid sites?
12:00 Introduction to ESCO Borderless by TowerXchange < How does combining energy services with security, passive and
< The format for today’s digital roundtable and how to join the active maintenance help minimise energy usage?
networking < How can the ESCO model be versioned to suit towercos?
< The scale of the current ESCO market < How do you balance maximising legacy equipment lifespan
< Forecasts for the continuing growth of ESCOs against site modernisation?
Matthew Edwards, Head of Research, EMEA, TowerXchange < What improvements can be unlocked by an ESCO audit of site
assets and operation?
12:10 What Orange expects from its ESCOs Thibaut de Rodellec, Deputy CEO, Camusat
< Why Orange has chosen to work with ESCOs Gabriel Bou Gebrael, General Manager – Telecom Services,
< Orange experiences from live ESCOs in six countries, managing IPT PowerTech
3,000 cell sites Kadri Hakim, Co-CEO, i-eng
< Expectations for ongoing ESCO relationships Further ESCOs to be confirmed
< How Orange will support the maturation of the ESCO ecosystem
Hervé Suquet, CTIO, Orange 12:55 Q&A
12:25 Q&A Part three: The ESCO Pipeline
Part two: ESCO Q&A 13:05 MNO requirements

< What is motivating each MNO to explore partnering with ESCOs?
12:30 How each ESCO is solving their partners’ power problems < How will partners be evaluated & how will success be measured?
< What is each ESCO’s footprint, future plans and what makes them Siphile Sibaya, Infrastructure and Facilities, MTN Group
unique? Further MNOs to be confirmed
< How can and ESCO adapt to limit the impact of the coronavirus
outbreak on networks? 13:20 Q&A
< What are the typical improvements in site availability once sites
transfer to ESCO-management? 13:30 ESCO Borderless Concludes
Our speakers
Hervé Suquet Siphile Sibaya Gabriel Bou Gebrael
CTIO Infrastructure and General Manager –
Orange Facilities Telecom Services
MTN Group IPT PowerTech
Thibaut de Rodellec Matthew Edwards Kadri Hakim

Deputy CEO Head of Research, Co-CEO
Camusat EMEA i-eng
TowerXchange
Our sponsor
Lead Sponsor Lead Sponsor with advanced inhouse solutions development and
manufacturing capabilities.
ieng Group IPT Powertech Group is also a complete telecom

infrastructure solutions provider combining telecom
Camusat Established in 2007, ieng Group is a leading provider services expertise with managed services proficiencies
of EPC and O&M services for the telecom and power with more than 4,500 specialists on board across Middle
In 40 years Camusat has become one of the market industries in Africa and Emerging Markets. The Group East, Africa and South East Asia.
leaders in the implementation of telecom infrastructures has operations in 18 countries in Africa and Asia and
and one of the most experienced network developers employs 2,000 full-time employees. Through our unique model, coupling our innovation
in the world with over 2.900 employees across five in energy savings solutions along with our telecom
continents. Expert on 5 business lines (telecom site The Group established CREI (Communication and infrastructure services expertise we have developed to
construction and installation, power systems & renewable Renewable Energy Infrastructure) as its investment become the largest T-ESCO globally with more than 10,000
energy, active equipment installation, fixed and fiber arm that develops, owns and operates a portfolio of sites under full management, where power is sold as a
networks deployment and managed services.) Camusat renewable energy assets across Africa and Emerging service on full or partial OPEX model basis.
Group fully support the constant evolving telecom actors’ Markets. Leveraging on the reputation, operational/
needs, building quality telecom network infrastructures, technical expertise and network of ieng Group, CREI aims www.iptpowertech.com
and preparing the ground for the deployment of future to become a leading player in the ESCO Industry. The firm
communication technologies. believes in reducing environmental impact and saving Co Sponsor:
on CO2 emissions by deploying more energy-efficient
At the end of 2017, Camusat launched a new activity power solutions thus providing a valuable alternative to
through its in-house investment vehicle Aktivco. This operators that seek to outsource their power generation Caban Systems
investment vehicle along with Camusat’s worldwide requirements.
operational capacity is answering the telecom sector’s Caban Systems, headquartered in Silicon Valley, is
need to outsource its energy infrastructure. Aktivco www.ieng-group.com a technology company focused on designing and
holds and manages energy assets over a long period, manufacturing lithium-ion energy storage solutions for
thus allowing telecom operators to focus on their core Lead Sponsor the telecom industry. Our connected platform delivers
business. Already leader in Africa with more than 2,500 real-time remote management optimized to provide clean
telecom sites under Esco model, Aktivco plan to deploy and reliable power for bad-grid, off-grid, and multi-
10,000 sites by 2022. tenants in co-located sites. It’s propriety design enables a
IPT PowerTech reduction of up to 85% in operational costs by eliminating
Flawless execution, quality services and innovative diesel and minimizing maintenances. Caban operates
solutions developed by R&D department allow Camusat IPT PowerTech Group is a leading full-fledged energy a manufacturing line in California and has operations
Group to meet their stakeholders’ objectives. systems integrator, and complete energy-efficient throughout in LatAm, North America and the MEA.
solutions provider; offering the Largest portfolio
www.camusat.com of customized telecom hybrid solutions worldwide www.cabansystems.com
Digital Networking
Networking is an essential part of the event experience, and the same is true at ESCO Roundtable Borderless.
For our speakers, sponsors and delegates, we will be acting as a community host to facilitate networking through a dedicated ESCO Borderless App,
which will stay live post-event to enable conversations and networking on the ESCO Borderless platform.
Those that sign up as speakers, sponsors and delegates will be able to navigate the attendee list, contact people they want to meet and arrange follow-
up conversations by email, phone and eventually face-to-face. And just like a real event, TowerXchange will facilitate introductions to keep missed
connections to a minimum.
ESCO Roundtable Borderless Tower Xchange
By invitation only: restricted to Director,
Wednesday 27th May 12:00 BST | 13:00 CEST/SAST | 16:30 IST VP and C-level attendees
Benefits Registrant Delegate* Associate sponsor ESCO sponsor
Watch the ESCO Roundtable Borderless
Access to the ESCO Roundtable Borderless Report
Access to live Q&A
Access to networking app
Facilitated introductions 3 5 10
Branding on Borderless website, marketing, app and report
Interview in ESCO Roundtable Borderless Report
Advert in ESCO Roundtable Borderless Report
Dedicated email shot to TowerXchange-selected data
Speaking role in ESCO Roundtable Borderless
*Delegate passes are free to qualifying full-time employees of ESCOs, MNOs, and towercos.
Industry breakdown of anticipated audience
Sponsorship 3.3%
3.3%
MNOs
Register as a delegate to options 6.7%

26.7%
ESCOs
Energy systems
get the full experience 7.3%
IPPs
To discuss sponsorship, contact
£250+VAT Commercial Director, Sarah Kerr on
8% Investors
Towercos
+44 7714 775700 or email
C&I off-takers
skerr@towerxchange.com 17.3% 22%
Utilities
Introducing TowerXchange
Over the last eight years, TowerXchange has built an unrivalled reputation as the leading research firm and community host in the
world of telecom towers and power.
TowerXchange are recognised for the quality of our research, for insightful agendas, and for delivering an outstanding customer experience.
We pride ourselves in our ability to facilitate personal connections between decision makers within this small but influential ecosystem.
TowerXchange has published over 4 million words of research, built relationships with over 40,000 decision makers, and we have hosted 24 large
scale events. TowerXchange Meetups are now proven, must-attend events for decision makers on five continents.
We have been tracking the emergence of ESCOs for several years, culminating in the publication of the TowerXchange ESCO market report 2018,
and the inauguration of this dedicated new event designed to accelerate the emergence of ESCOs as a critical new category of stakeholders in
communications infrastructure.
Matthew Edwards, Head of Research, Request a copy of our ESCO research

EMEA, TowerXchange
ESCOs now operate the power While it impressive that the ESCO market has
doubled in size in the last three years, even more
importantly, ESCOs are achieving their performance
systems at almost 50,000 cell sites, objectives. Challenging Service Level Agreements
(SLAs) requiring 99.95% uptime (the equivalent of
rising to over 100,000 by 2024 14 minutes of downtime per month) and above are
being achieved and surpassed – TowerXchange has
received multiple reports that ESCOs are regularly
ESCO market-makers TowerXchange and Orange call for leaders of this new
achieving 99.99% or even 100% uptime each
ecosystem gather at the ESCO Roundtable this October month. Very few penalties for downtime are being
incurred. Similarly, costs and carbon footprints are
Telecom energy services companies today own and operate the being reduced. The magnitude obviously varies by
power systems at 49,316 cell sites. While that represents only 1% of operating conditions, but savings in the range of 15-
the 4.7mn cell sites in the world, it also represents more than 10% 70% are regularly disclosed.
of the estimated 400,000 site addressable market for telecom ESCOs.
The ESCO market has grown by more than 5.5x in the last five There has not just been operational proof of
years. Over the next five years, telecom ESCOs will spend US$1.8bn concept; investor buy-in in the form of hundreds of
to deploy a total of 200MW of distributed generation and energy millions of dollars of committed capital represents
by Matthew Edwards, Head of Research, storage. Leaders from the telecom ESCO ecosystem are taking part the financial proof of concept for the business
EMEA, TowerXchange model. Development Finance Institutions are a
in the virtual ESCO Roundtable Borderless on the 27th May.
popular source of affordable debt for ESCOs, but
we’ve seen private equity and infrastructure funds
Keywords: Aktivco, Applied Solar Technologies, Ardom, Bhaskar Solar, Business Model, CREI, Camusat,
linked with the asset class.
Debt Finance, Distributed Power Africa, ESCOs, Energy, Energy Efficiency, Energy Storage, Energy
Vision, Environ Solar, Fixed Price, Hybrid Power, ieng, IPT PowerTech, Market Forecasts, Multi-Region,
One thing that continues to attract a deepening pool
O&M, Off-Grid, Orange, Renewables, Research, SLA, Sagemcom, Unreliable Grid, Uptime, Voltalia,
of prospective investors in ESCOs is the healthy
Yoma Micro Power
pipeline of opportunities that are coming to market,
which promise to sustain ESCOs’ impressive growth
trajectory in the coming years. TowerXchange is
Read this article to learn: aware of live ESCO RFPs for a total of 6,600 sites
< The current scale of the telecom ESCO market - which companies are the market leaders? across six countries in Africa (see figure one). We
< The pipeline of live ESCO RFPs also understand that at least one of the Myanmar
< Where will we find further growth beyond that near term pipeline? towercos has had an on-off ESCO RFP for several
< Sizing the ESCO market in aggregate MW and total capital to be deployed to modernise sites months, while the Pakistani market is beginning
< Forecast for the growth of ESCOs over the next five years to open up with a landmark first ESCO proof of
concept on almost 70 sites soon to be announced.
Meanwhile, ESCOs that have navigated the turmoil Figure one: Live ESCO RFPs known to TowerXchange
of market restructuring in India are seeing light
at the end of the tunnel. ESCO pilots continue in
Central and Latin America.
Looking beyond opportunities in the immediate

term, TowerXchange has identified a next tier of
73,250 cell sites where conditions are suited to
partnerships with ESCOs. That five year pipeline
totalling 79,850 cell sites represents a further Orange Etisalat Misr Safaricom Ethio Telecom Vodacom Orange Mali
200MW of distributed generation and energy Cameroon 1,000 1,200 1,200 South Africa 1,800
storage. Including sites where the power systems 300 1,400
are already owned and operated by ESCOs, the
market size aggregates to a total of 300MW, much of
it renewable.
We estimate the value of the telecom ESCO market,

in terms of total capital outlay on site modernisation
in the coming five years to be US$1.8bn. That
Source: TowerXchange, 2019 Q4
market valuation is based on equipment vendors’
addressable market including both currently
contracted sites not yet modernised, and the
aforementioned five year pipeline of a further
How we define a telecom ESCO
79,850 sites, but adjusting for the lower capex
deployed at on-grid sites.
TowerXchange has used a broad and inclusive definition of an ESCO in this study. We define an energy
Turning to the ESCO market leaders (see figure two), services company (ESCO, sometimes known as a TESCO – Telecom Energy Services Company, or RESCO
you could describe any of seven different ESCOs as – Renewable Energy Services Company) as any company which deploys their own capital to acquire
the market leader, depending on how one defines energy equipment for telecom cell sites, then selling energy back to the site owner (MNO or towerco),
market leadership. either charging a fixed monthly fee or charging by the kWh consumed.
< In sheer site count terms, IPT PowerTech is the

An alternate model is the ‘guaranteed savings’ model, under which the towerco or MNO continues to
world’s largest telecom ESCO with over 10,000
sites across Lebanon, Guinea and through their deploy their own capex, but their ESCO partners still take a risk in guaranteeing the performance of
‘guaranteed savings plan’ with IHS Towers their systems<
Nigeria
Figure two: ESCO pioneers by site count
Sagemcom 1,000
across DRC, Liberia, Sierra Leone
Mahindra Powerol, India 3,500
Cambridge Energy Resources, India 970
IPT PowerTech 10,200 Environ Solar / Bhaskar Solar, India 800

inc 6,000 Nigeria, Camusat’s Aktivco 2,000
across Burkina Faso, Chad, ieng’s CREI 736
2,500 Lebanon,
Cote d’Ivoire, Niger inc 400 Guinea, 200 Liberia, 126 CAR, 10 Afghanistan
1,700 Guinea
Ascot 400
Distributed Power Africa Ardom, India 500 inc 320 Sudan, 60 Greece,
30 Indonesia
2,000
Yoma Micro Power, Myanmar Voltalia, OMC Power,
250 Myanmar 160 India 150
Undisclosed, HYBRICO,
MediPower, Italy 150 Pakistan 70 CALA 50
Biswal, Nigeria, 2,800
Energy Vision 9,800

including 500 Gabon, 700 Nigeria, *Mantrac, Nigeria, 1,200
Applied Solar Technologies,
8,600 India via Tower Vision
India 9,150
*Enertika, CALA, 3,500
*Pace Power, India 300 *Acme, India 100 *Caban Systems, undisclosed
*Unverified site count Source: TowerXchange, 2019 Q4
Figure three: Comparing towerco growth in MEA from 2009 with ESCO deploying ESCOs for Orange CAR and for MTN in
growth six years later Source: TowerXchange, 2019 Q4
Guinea and Liberia. Sagemcom also has 1,000 ESCO
sites for Orange in three countries.
80,000 Towerco sites
Turning to India, several credible ESCOs have
70,000 ESCO sites emerged with leaner processes and improved
60,000 margins after the turbulence of MNO market
consolidation. The aforementioned AST lead the
50,000 way, but Mahindra Powerol operates 3,500 sites
40,000 on an energy as a service (EAAS) basis, most for
American Tower. American Tower, alongside Indus
30,000 Towers, are also among the principle customers of
the impressive Ardom.
20,000
10,000 New ESCOs are emerging serving new markets.
Engro’s Reon are poised to make a big impact in
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pakistan, alongside SBEEC which provides smart
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 metering for 1,000 sites, with intention to expand
into full EAAS. In Latin America, HYBRICO and
< Camusat’s Aktivco may be the fastest growing organic growth, the Yoma Micro Power portfolio Caban Systems are piloting ESCOs for MNOs and
ESCO, having won contracts from Orange in four has grown 25x in the past 18 months: they had 10 towercos, while Enertika claims to be providing an
African countries totalling 2,000 sites, with at hybrid power plants serving towers, EAAS-type service focusing on air conditioning at
least one more award imminent communities and commercial and industrial 3,500 sites.
< India’s Applied Solar Technologies (AST) has the (C&I) off-takers in Myanmar a year and a half ago
highest site count of ESCO sites under the fixed – that figure is up to 250, and they’re targeting We have not seen a disruptive innovation like
cost model, with over 9,000, supplemented by a 2,000 ESCOs, with the potential to unlock new capital,
solar rooftop business for other C&I off-takers < Speaking of telecom ESCOs that also serve C&I new efficiencies and performance improvements
< The Energy Vision extended management team off-takers, the market leaders in this category in the operation of communications infrastructure,
provides energy as a service to just under 10,000 are Distributed Power Africa, which provides since the advent of the towerco business model.
cell sites, including Africa’s oldest ESCO with power to 1,800 Econet cell sites, but also provides Indeed, when one overlays the adoption of ESCO
Airtel Gabon, a recent contract win for 700 sites installations up to 5MW, serving C&I customers with the adoption of towerco partnerships six years
from a Nigerian towerco, and via their as well as 200 PoPs, including data centres and later in MEA (see figure three), you can see there
relationship with India’s Tower Vision, which switching centres, for Liquid and DFA is a precedent for the continued scaling of ESCOs.
provides energy as a service on all 8,600 sites in ESCOs already operate more than 10% of the cell
their portfolio A review of credible ESCOs must also mention CREI, sites in bad grid markets – they already operate 20%
< If you want to measure market leadership by the new investment vehicle from ieng, which is of such sites in SSA, rising to 50% by 2022.
Figure four: TowerXchange forecasts ESCOs will operate the power TowerXchange market sizing and forecasting
systems at 108,566 cell sites by 2024 methodology
120,000 TowerXchange doesn’t use mathematical models
to map market size and to forecast growth. We
prefer to speak to market stakeholders, quantify
100,000 the scale of their businesses today, and speak to
their prospective customers, size current RFPs,
and identify the specific markets where they are
80,000
considering partnering with ESCOs. We aggregate
those insights to build our market sizing and
60,000 forecasting data<
Referring to figure four, TowerXchange forecast

that the number of sites where power systems
40,000
are owned and operated by ESCOs will more than
double from 49,316 today to 108,566 by 2024. Three
20,000 years ago, the narrative around ESCO concerned
the search for “proof of concept”. Today, ESCOs
have achieved launch velocity, and the next five
years will be about driving to scale, whether that’s
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
by engaging new MNO and towerco customers,
attracting more low-cost capital, entering new
Year Asia sites MEA sites RoW sites Total ESCO sites
markets, or adding incremental customers and new
2015 6,654 200 1,810 8,664 off-takers to ESCOs’ existing footprints<
2016 8,854 13,980 1,810 24,644
Join the market leading ESCOs, plus many of
2017 £9,379 14,850 1,760 25,989
their current and prospective MNO and towerco
2018 12,325 17,800 3,750 33,875
customers, and their investors and suppliers at
2019 24,430 21,126 3,760 49,316 the ESCO Roundtable, taking place on October
2020 27,030 27,726 3,810 58,566 13 and 14, co-located with the TowerXchange
2021 30,930 32,376 4,010 67,316 Meetup Africa, at the Sandton Convention Centre,
Johanneburg. The event will be co-hosted by
2022 35,930 40,126 4,260 80,316
TowerXchange and Orange, together with founding
2023 41,930 47,626 4,510 94,066
sponsors Aktivco and IPT PowerTech, and associate
2024 46,930 56,876 4,760 108,566 sponsors Energy Vision, ieng and Reon Energy.
Source: TowerXchange, 2019 Q4 www.towerxchange.com/meetup/esco-roundtable
ESCOs emerging as critical new At the TowerXchange Meetup Africa 2019, in the
Energy working group and ESCO round table, it
was clear that ESCOs were emerging as critical
buyers of telecom energy equipment stakeholders in telecom energy in SSA. Why?
MTN, Ethio Telecom and Vodacom poised to follow Orange in partnering with In Africa’s unforgiving operating environment,
ESCOs to drive operational efficiency and green energy the gensets and batteries on which most cell sites
rely do not last long. Ageing power systems result
in increased instances of downtime. Diesel gensets
By the end of 2020, Orange will be working with ESCOs in nine Sub- often run 24/7, making fuel logistics critical to
Saharan African countries – outside of their partnerships with towercos, continuity of service, yet diesel refuelling is not the
almost all Orange’s power systems in Africa will be operated by ESCOs. core competency of any MNO. Even though the cost
MTN plans to transition the majority of their 13,000 retained towers in of green energy has never been lower, only a single
bad grid markets to ESCOs. Safaricom are exploring an ESCO in Kenya, digit percentage of Africa’s cell sites run on green
Ethio Telecom has issued a substantial ESCO RFP in Ethiopia, and energy. Africa’s MNOs are among the largest power
Vodacom is exploring ESCOs in DRC and South Africa. ESCOs will operate generators on the continent – they don’t want to be!
the power systems at more than half of Africa’s off-grid cell sites, or cell
sites on unreliable grid connections, by the end of 2021. All these factors are driving a growing number of
Africa’s MNOs to partner with ESCOs.
Keywords: Aktivco, Asset Register, Bankability, Batteries, Best of
TowerXchange, Burkina Faso, Cameroon, Central African Republic, Towercos have made tremendous progress in
Congo Brazzaville, Cote d’Ivoire, DRC, Dimensioning, ESCOs, improving uptime and efficiency in African
Egypt, Energy, Energy Efficiency, Ethio Telecom, Ethiopia, Guinea telecoms. But the towerco business model breaks
Conakry, Hybrid Power, IPT PowerTech, Liberia, Logistics, MNOs, down in rural, single tenant environments.
MTN, Mali, Niger, Off-Grid, On-Grid, Operational Excellence, Opex Towercos cannot achieve the necessary scale in
Reduction, Orange, Procurement, ROI, Renewables, SSA, Safaricom, smaller countries, especially where the operating
Site Surveys, Site Visits, Skilled Workforces, Solar, Sudan, Unreliable environment in those countries is challenging.
By Kieron Osmotherly, CEO,
Grid, Uptime, Vodacom Finally, the towerco business model is not calibrated
TowerXchange
to emphasise green energy – most hybridisation
entails renewing and upgrading battery banks,
Read this article to learn: rather than progressing to full hybrid renewables.
< Orange’s successes as ESCO pioneers in six, soon nine, African countries
< MTN’s appetite for ESCO partnerships ESCOs hold the key to unlocking the capital
< The requirements of Africa’s two largest ESCOs: Aktivco and IPT PowerTech investment in renewable energy solutions that can
< The answers to ten frequently asked questions about ESCOs address the MNOs’ challenges, and fill a gap in the
market left by towercos.
Orange pioneers the ESCO model
The cherry on the cake: multi-tenant ESCO sites

Orange has activated ten year ESCO contracts in
six countries (DRC, Niger, Guinea Conakry, Cote
MNOs, Orange in particular, would like to see the ESCOs’ perimeter expanded to include maintenance
d’Ivoire, Liberia and Burkina Faso), with live RFPs
of both passive and active equipment, site security and, ultimately, co-location of sites to multiple
for ESCOs in three more countries (Cameroon,
tenants, enabling the mutualisation of power systems and a full range of services to multiple MNOs.
Central African Republic and Mali).
We are already seeing ESCOs building new sites for MNOs, deploying networks deeper into rural
areas and accelerating digital inclusion.
Since partnering with ESCOs, Orange reports
network uptime ratio improvements of 30-40% in
Another goal is for every operator in a given country to partner with an ESCO. Imagine the
Burkina Faso and Niger. Even when sites go down,
efficiencies ESCOs could enable if they were able to consolidate the primary or backup power systems
mean time to repair (MTTR) has been significantly
on every site in a country, and share those resources with every MNO! We could see dramatic
improved.
reductions in both capex and opex, as site visits would be dramatically reduced. And the impact in
terms of carbon emissions reduction could be tremendous!
“It’s a partnership, not a supplier relationship,”
explained Orange Deputy CTIO Jocelyn Karakula
of concept (PoC) for an ESCO to assume an initial in Nigeria, Cote d’Ivoire, Cameroon, Ghana and
at the ESCO round table at the 7th Annual
100 of their 2,000 sites in Sudan. Diesel prices have Uganda. Sites in MTN’s relatively good grid markets
TowerXchange Meetup Africa.
recently trebled in Sudan, driving up opex in a of Iran (~15,000 sites) and South Africa (~12,000
market where 90-95% of cell sites run on diesel sites) are also unlikely to be handed over to ESCOs.
“We’re structuring deals such that ESCOs should be
gensets 24/7. Under the Sudanese ESCO PoC, MTN is MTN explained that their principle energy challenge
profitable from day one,” added Karakula, before
not proposing to sell their existing power assets, but in South Africa was not so much one of grid
concluding: “at this relatively early stage, our
is looking for a partner to replace those assets with availability, which remained high, but more one of
ESCO partnerships have been a success from an renewable energy solutions. MTN are open to solar, battery theft, which affected ~3,000 sites per year.
economics perspective, in some cases surpassing wind, LPG – any alternative to diesel. MTN has not deployed much lithium-ion yet, and
what was expected in the business plan.” where it has, has not seen much dampening of theft.
Another ESCO PoC is in the pipeline for MTN Congo
MTN has 13,000 potential ESCO sites Brazzaville, with an RFP expected in Q120. MTN currently sources most of their hybrid energy
solutions from the big four OEMs: Huawei, ZTE,
MTN retains around 40,000 towers outside their MTN sees ESCO partnerships as a logical next Nokia and Ericsson. Asked about their appetite for
partnerships with towercos. The power systems at step for their smaller opcos, including the green energy going forward, MTN said they were
around 13,000 MTN sites could be handed over to aforementioned Sudan and Congo Brazzaville, acutely aware of their carbon emission reduction
ESCOs in the medium term. At the TowerXchange plus Liberia, Guinea, South Sudan, Yemen, Syria targets and taxes, and suggested they foresee using
Meetup Africa 2019 Energy Working Group, MTN and Afghanistan. MTN is less keen to partner with ESCOs as the primary vehicle to extend their rollout
revealed that they have issued a non-binding proof ESCOs where they already have a towerco partner: of green energy solutions.
all of IPT’s Nigerian sites are effectively off-grid.
IPT is the largest of what was originally dubbed
IHS’s “Big Five” partners, of which Biswal and
M-P Infrastructure also remain active. Around
60% of IHS Nigeria’s sites have been hybridised,
including the majority of those operated by IPT,
although around 6,000 IHS Nigeria sites still run
primarily on diesel. IPT has some sites on good
grid connections outside Nigeria.
IPT are open to exploring innovative energy

solutions, which they test in their facilities in
Lebanon.
Orange’s Jocelyn Karakula leads the ESCO round table

Ten frequently asked questions about ESCOs
The requirements of Africa’s two largest ESCOs: New technologies must be certified by Aktivco,
Aktivco which undertakes proof of concept tests in ESCOs already own or operate the power systems
Romania. on more than 25% of SSA’s cell sites on unreliable
Aktivco is Camusat’s ESCO play, managing 2,000 grid connections or off-grid, and TowerXchange
sites in Chad, Burkina Faso, Cote d’Ivoire and Niger. The requirements of Africa’s two largest ESCOs: foresee that proportion approaching 50% in
Aktivco expect to build 250-280 additional sites IPT PowerTech the next two years. As such, it is important to
per year across these countries. They anticipate understand a few fundamentals about the ESCOs.
closing two more ESCO contracts in new countries IPT PowerTech is also an ESCO, operating 10,000
imminently, adding a further 1,000 sites. sites in SSA. Half are in Nigeria, where they operate What kind of energy equipment do ESCOs buy?
the “guaranteed savings model” under which their
Around 40% of Aktivco’s sites are on grid, albeit client, IHS Towers, deploys the capital, but IPT While there are a couple of ‘technology agnostic’
those grid connections are of variable quality. For takes the risk (and reward) from diesel savings. ESCOs, Africa’s largest ESCOs deploy their own
example, grid uptime is ~98% in Cote d’Ivoire, but IPT operates a conventional ESCO model for Alfa hybrid energy solutions. As such, manufacturers
still suffers short outages; the grid is also quite and touch, the two MNOs in Lebanon, representing of containerised, plug and play hybrid energy
reliable in Burkina Faso, but connections are around 30% of IPT’s ESCO sites. The balance of systems will find it difficult to sell to ESCOs – so
expensive; while in Chad, grid availability is closer IPT’s ESCO sites are in Guinea in a partnership with they may need to compete to win ESCO contracts
to 60%, and there is an energy crisis in Niger. Orange. IPT is adding around 500 sites per year. directly. However, most ESCOs are aggregators
of third party components, of which they ESCOs
Aktivco deploys their own powercube, ePower, but Capacity shortages mean even in Lagos, the grid emerging as the fastest growing, and soon the
they aggregate best-of-breed components. is online for only around five hours per day, so largest, category of buyers in SSA.
ESCOs aim to upgrade the energy equipment at the
Towercos’ appetite to partner with ESCOs majority of their sites, typically over a 24 month
period. Most ESCOs are prepared to run down any
remaining lifecycle of legacy power systems before
Many emerging market towercos are rightly proud of their achievements in developing and providing
modernising sites.
power-as-a-service. Many of those towercos have invested substantial financial and human capital to
develop the operational excellence necessary to achieve and surpass challenging uptime SLAs. “I like
What savings are MNOs looking for when
spending capex to reduce opex,” summarised the CEO of one African towerco.
working with ESCOs? And how profitable are
ESCOs?
It will be a challenge to convince towercos with mature, accomplished energy services teams to
relinquish that responsibility to ESCOs. For Orange, targeted savings are based on a total
cost of ownership (TCO) analysis, against a baseline
But towercos entering a virgin market, such as Ethiopia, or towercos making their first forays into based on the cost of passive infrastructure, energy
managed power services, would be well advised to seriously consider partnering with ESCOs opex and security.
ESCOs standardise where possible, and are inclined ESCOs consider total cost of ownership (TCO), not “As many of the MNO’s costs are transferred to the
to use proven solutions with which their field just the capital cost of solutions, and with ten year ESCO, and Camusat was already providing managed
maintenance teams are familiar. contracts, ESCOs’ TCO horizon may be longer than services for many of these sites, we already know
an MNO’s or even a towerco’s. how much fuel goes into the existing sites, so
Some ESCO partnerships include explicit targets we know inherited fuel and security costs,” said
to increase utilisation of renewables: “our green How long does it take an ESCO to modernise its Orange’s partner ESCO Aktivco. “This is why the
energy ratio was 3% - modernisation driven by sites? strongest ESCOs are already operational companies
ESCOs should drive this over 50%,” said one MNO. – we have a good understanding of the cost of a
It can take up to a year to negotiate the SLAs maintenance site visit. Sometimes we also absorb
Most ESCOs continue to primarily use lead-acid and KPIs, and to finalise an ESCO contract, but the MNO’s operational team, so we need to know
batteries – “we’re open to lithium-ion,” said one the process can be expedited when subsequent the overhead costs too. We prefer the MNO to be as
ESCO “but not convinced”. contracts are iterations of an initial agreement. transparent as possible about their existing costs,
otherwise we’d have to inflate our quote to be safe.”
All equipment must integrate with the ESCO’s Even when a contract is signed, ESCOs don’t start
monitoring and management platform. upgrading sites right away – they start with a Of course ESCOs deploy substantial capex into site
comprehensive audit of sites to determine the modernisation, the effect of which on opex is not
Most ESCOs are at a relatively early stage in their ideal solutions. While ESCOs typically modernise always clear at the outset of the agreement. So it
evolution, such that vendor financing can be the energy equipment at 2-4% of their portfolio may be a couple of years before the full TCO can be
attractive to them, although operational delivery per month, one their biggest challenges is the lag compared before and after the portfolio has been
and the ability to achieve SLAs will always be their between the order and installation of equipment, fully modernised. Only then will we be able to make
greatest priorities. which typically takes two to three months. a final judgement about how profitable ESOs are.
Orange proudly proclaim that their ESCO projects example in terms of the number of sites modernised “flexible enough to accommodate change over the
enable their partners to be profitable from year one, per month, and the impact on their green energy ten year term of the ESCO contract.”
a suggestion not disputed by their biggest partners. ratio.”
With the ESCO’s fees fixed from the outset of the One of Orange’s partner ESCOs added “We are
contract, achieving profitability is contingent upon How are ESCOs paid, in what currency, and is aligned to our MNO partners’ changing power load.
reducing energy opex, which first means reducing there indexation? We know that if a site starts with a 3kW load, it
diesel consumption. This in turn is dependent on probably won’t stay at 3kW over the ten year term
operational performance and site modernisation. So While there are variants on the model, most ESCOs of the contract. The load, the site typology, even the
just because an ESCO can be profitable in year one, agree a fixed fee per site per month. There are location of the site may change. Flexibility is key,
doesn’t mean to say it will be. typically a number of different rates for different but yes our pricing changes based on load and as
site typologies. the site typology changes over the years.”
Some aspiring ESCOs have questioned whether that
near term profitability is achievable without the One ESCO revealed that they were paid in three Do ESCOs acquire the existing power systems at
ESCO bundling passive and active maintenance, parts:
cell sites when they assume control?
together with site security. What is clear is that all < The fee related to energy is paid in whatever
stakeholders agree that the ESCO business model is currency they buy the fuel in
Some ESCO contracts transfer ownership of legacy
significantly enhanced when additional MNOs from <The O&M fee is typically paid in local currency
power assets from MNO to ESCO, but more often,
the same country partner with the same ESCO. < Fees related to capex are typically paid in Euros
the ESCO receives an indefinite right of use for free.
or U.S. dollars so as to minimise FX risk
In either case, the ESCO will deploy its own capex
How do MNOs evaluate respondents to an ESCO
to modernise, after which the ESCO will own the
RFP – is price the primary factor? Indexation tends to be calibrated according to
power equipment.
the energy mix. Where energy primarily comes
Of course price is a significant factor, but the from the grid, indexation is primarily linked to
What happens at the end of the ESCO contract?
financial strength of the ESCO company is critical CPI. Where energy primarily comes from diesel,
– it is important for the ESCO to demonstrate their indexation is primarily linked to the price of diesel.
capability in the long term. In the unlikely event that an ESCO contract is not
How do ESCO agreements accommodate changes extended, the MNO typically has a reversibility
There is also a growing feeling that it would be in power load, as next generation networks are clause giving them the right to buy the power
healthy to have more than the two to three ESCOs rolled out or as co-locations are added? equipment.
that are currently securing the majority of contracts
in Africa, to mitigate counterparty risk. Orange explained that they undertake an audit of What is the addressable market for ESCOs?
every site prior to opening an ESCO RFP, assessing
“Some MNOs are less focused on site modernisation, the current and future configuration – so there’s There are a range of opinions on this matter, but
they just have price and performance targets,” visibility of site configuration changes anticipated, most commentators agree that cell sites in countries
said one ESCO. “Other MNOs want to understand for example with 4G overlays increasing power with a significant number of sites off-grid on
how you will reach those performance targets, for requirements. Orange’s terms are described as unreliable electricity grid connections, where grid
unlock significant economies of scale, so this is also
a priority.
The “TowerXchange ESCO Market Report 2018”

identified a total addressable market for ESCOs of
125,280 cell sites in SSA and MENA, of which around
20,000 (16%) are already contracted.
How will the role of the ESCO expand in the

future?
The scope of ESCOs is expanding all the time,

from power-as-a-service to full passive and active
infrastructure maintenance and security. ESCOs
are already starting to expand beyond cell sites
to manage the power systems at data centres,
technical sites and MNOs’ retail outlets. ESCOs are
also starting to explore community power and,
The energy working group at the TowerXchange Meetup Africa
potentially in the future, co-location sales and the
is usable on average for less than 16 hours per day, the Central African Republic and Egypt, the mutualisation of power systems to all operators in a
are the most obvious targets. opportunity in the latter country being subject market.
to resolution of issues related to diesel subsidies.
Where emerging market towercos remain reluctant Orange has identified a total of 15,000 sites, in 13 We are already seeing ESCOs build several hundred
to partner with ESCOs, towerco sites might be countries, which could be transferred to ESCOs. new sites per year.
medium term rather than near term targets for A substantial ESCO RFP is in progress from Ethio
ESCOs. ESCOs can still partner with MNOs alongside Telecom, while another large ESCO opportunity is Special thanks to Jocelyn Karakula, Deputy
a towerco, as exemplified by Orange Cote d’Ivoire, imminent in Kenya with Safaricom. MTN has 13,000 CTIO of Orange, for moderating the ESCO round
which is working with both IHS Towers and cell sites in bad grid markets, and is keen to explore table, and to the energy equipment buyers who
Aktivco. We have already seen ESCOs take over ESCO partnerships – MTN has an ESCO proof of attended this year’s energy working group,
100% of the sites for MNOs in countries without concept live in Sudan and another imminent including Aktivco, IPT PowerTech and MTN.
towercos present – a fact which illustrates that the in Congo Brazzavilla. Vodacom has long been
addressable market for ESCOs includes on-grid as considering partnering with an ESCO in DRC and, TowerXchange are partnering with Orange to
well as bad grid and off-grid sites. potentially, in South Africa. host an “ESCO Roundtable” for the pioneers
of this transformational model. Checkout
The near term pipeline of ESCO opportunities Once an ESCO is active in a country, convincing the www.towerxchange.com/meetups for more
consists of ~3,000 Orange sites in Mali, Cameroon, other MNOs to partner with the same ESCOs would information
Tower Xchange
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Wednesday 27th May 12:00 BST | 13:00 CEST/SAST | 16:30 IST

ESCO Roundtable Borderless

Cover image courtesy of Camusat

Co Sponsor: Organised by:

< Share information on the successes of already Wind

Why should you register for the ESCO Roundtable Borderless

Energy Vision operates Africa’s first ESCO

Millicom Chad partners with Aktivco

Etisalat to launch 1,000 site RFP in Egypt

Vodacom South Africa launches ESCO RFP

Orange reports uptime ratio improvements Safaricom preparing ESCO RFP

12:25 Q&A Part three: The ESCO Pipeline

Part two: ESCO Q&A 13:05 MNO requirements

Thibaut de Rodellec Matthew Edwards Kadri Hakim

ieng Group IPT Powertech Group is also a complete telecom

Watch the ESCO Roundtable Borderless

Access to the ESCO Roundtable Borderless Report

Access to live Q&A

Access to networking app

Branding on Borderless website, marketing, app and report

Interview in ESCO Roundtable Borderless Report

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Dedicated email shot to TowerXchange-selected data

Speaking role in ESCO Roundtable Borderless

Industry breakdown of anticipated audience

Register as a delegate to options 6.7%

Matthew Edwards, Head of Research, Request a copy of our ESCO research

Looking beyond opportunities in the immediate

We estimate the value of the telecom ESCO market,

< In sheer site count terms, IPT PowerTech is the

IPT PowerTech 10,200 Environ Solar / Bhaskar Solar, India 800

Biswal, Nigeria, 2,800

Energy Vision 9,800

*Enertika, CALA, 3,500

*Unverified site count Source: TowerXchange, 2019 Q4

Referring to figure four, TowerXchange forecast

The cherry on the cake: multi-tenant ESCO sites

IPT are open to exploring innovative energy

Orange’s Jocelyn Karakula leads the ESCO round table

The “TowerXchange ESCO Market Report 2018”

How will the role of the ESCO expand in the

The scope of ESCOs is expanding all the time,

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