Energy Vision: progress update from the first ESCO of scale in SSA

Between 2011-2016, MNOs in Africa seeking to reduce operational complexity had preferred strategic partnerships with tower companies to ESCO partnerships. But when the tower sale process of one operator in Gabon faltered, they sought an alternative strategic partner: pioneering ESCO Energy Vision. Africa’s first ESCO project of scale, Energy Vision is currently operating and managing 280 towers, 40% of which are off grid. Over two years into the project, TowerXchange reconnected with our old friend Ofer Ahiraz, CEO of Energy Vision, to learn how they are progressing.

TowerXchange: Please introduce Energy Vision to our readers.

Founded three and a half years ago, Energy Vision is an Energy Services Company, or ESCO, focusing entirely on the African telecoms market.

Our vision is simple: to offer MNOs and towercos reliable energy at a reasonable, predictable, fixed monthly price. We deploy the capex to modernise sites’ power systems to the latest technology including RMS, and undertake maintenance, upgrades and refueling to offer -48VDC to power telecom equipment against predefined Power Availability (PA) and Service Level Agreements (SLAs), depending on the site priority/category.

We are vendor agnostic, so have the freedom to select the best, most reliable and cost effective technical solution for the specific use case, country or environment. We measure total cost of ownership (TCO) over a ten year period.

TowerXchange: First please give us some context by introducing the structure of the mobile and tower markets in Gabon.

In Gabon there were four MNOs, led by fixed line incumbent Gabon Telecom, which trades under the Libertis brand, which is being privatised and is consolidating networks with MOOV, now also owned by Maroc Telecom. Their main competitor is Airtel Gabon, joined by Azur, a new small operator.

There are around 1,000 cell sites in Gabon, most of which are in the main cities, with the usual blend of rooftops and light towers in urban areas. While Airtel did try to sell their towers, 100% of the country’s towers remain owned by the MNOs. Very few towers are shared.

4G has been launched and there is reasonably good coverage and QoS in the main cities. Gabon was the first country in Africa to have mobile coverage; they’ve been pioneers in Digital TV, fiber and cellular coverage. The country has near 100% economic coverage.

TowerXchange: What have been the drivers for the MNO in Gabon to partner with an ESCO?

The MNO we are working with were seeking to reduce opex while securing a commitment to improve power availability. Energy Vision now gives them a single point of responsibility for power availability; we have clear KPIs governing power availability with penalties if we were to fall short of our Service Level Agreement. Since we started we have managed to deliver power availability (PA) of 99.99%, which is higher than our contractual commitment.

This partnership relieves the MNO of the financial burden to invest in power equipment, freeing their budget to invest in their network.

Our client was impressed with the level of professionalism Energy Vision showed regarding our proposed solutions, and by our fast implementation schedule. They were also impressed by our familiarity with the country: myself and my colleague have worked in Gabon for many years – even prior to my time at Leadcom, I spent almost 20 years with Motorola and among other projects I was rolling out Gabon’s analogue cellular network.

TowerXchange: What is the scale of the project? And how has it been financed?

The scope of project includes 280 sites and the contract has a nine year duration.

The venture is financed by our equity shareholder Allied Group, a multi-billion-Euro private European trust, and we got also the support from GIEK, the Norwegian export credit agency, via our friends at Eltek.

TowerXchange: What is the current state of the project? How many sites do you have under management?

We have 280 sites (115 off grid and 165 on grid) running on our equipment (full hybrid outdoor systems, most with solar) connected to our NOC via a Remote Monitoring System (RMS).

Energy Vision has also recently been awarded responsibility for management of all passive elements of the sites – towers, fences, structures et cetera.

Energy Vision has reduced CO2 emissions by 3,088 tons per year, reduced fuel consumption by 1,157m³ per year, equating to a 68% fuel and CO2 emission reduction! TowerXchange: It’s been three years since Energy Vision signed the first ESCO contract of scale in SSA – can you talk us through the key milestones in executing on the contract?

The key milestones in executing the contract were:

1. Learning the network and tailoring the solutions to meet the specific requirements of the sites

2. Ordering the equipment and ensuring on time delivery

3. Implementing the right technology in order to achieve the KPIs and expected savings

4. Building the team to provide high level maintenance and constantly monitor performance

The main challenges we faced are as they would be in most projects – things over which we have no direct control such as:

- Late delivery by one of our main suppliers

- Logistics and customs clearance

- Weather affecting access to sites during the rainy season, including bridges and trees collapsing

Over our first two years, we have also learned about our suppliers and manufactures attitude and their approach toward problem solving and support. And of course we learned about the products’ performance in the field. For obvious reasons I will not get into details but it was interesting to evaluate!

TowerXchange: What have been the critical success factors? And what lessons learned can be transferred to other MNOs or towercos considering partnerships with ESCOs?

Open communication in the relationship with the customer – this has been the critical success factor not just for this ESCO project, but throughout my career.

Only with a true spirit of team work and openness, without finger pointing, can the best results be achieved. And this has been our approach from the beginning. All stakeholders, from top management to project managers and field technicians, were updated, and objectives aligned to support shared goals. We had weekly update and planning meetings, and a clear reporting structure with escalation channels.

TowerXchange: Tell us about the operational environment in Gabon, for example what proportion of the sites are on good grid, unreliable grid and off grid? How spread out are the sites and what are the implications for the autonomy necessary to maximise uptime?

Around half the sites, mostly those in the main cities, are on good grid connections, with around 40% off grid. Generally the grid is relatively good in Gabon compared to elsewhere in SSA; with enough battery backups, urban and suburban sites should not be a major problem. However, we have started with the most complicated sites in remote areas, where there is the greatest necessity to have reliable power solutions.

At just over 250,000sqkm, Gabon is slightly smaller than the State of Colorado, but sites are still quite broadly dispersed, so we organise our O&M team into nine regions, each taking a cluster of towers such that they are able to reach the site in a time consistent with our SLA commitments.

TowerXchange Who undertakes the installation, operations and maintenance of the power systems at the sites – what capabilities have you kept in-house and what is outsourced?

All our O&M and NOC staff are in-house. It’s part of our vision that our guys are local and well trained – they understand the technology, they understand ours and our client’s expectations.

Yes we’ll outsource some mechanical installation labor, or outsource transportation to serious logistics companies with the right cranes and trucks to do the job, but energy management is the core competence of an ESCO, so that’s all in-house.

The solutions we offer to the market are much more advanced than what is typically on today’s cell sites. Our equipment is IP controlled and remotely monitored, which means our technicians need a level of competency and skills way beyond oil changes. Our field technicians are using their laptops to configure controllers and communicate with different elements of sites. Without the right training, support and information refreshment, we won’t achieve the necessary talent level, so we have no option to outsource.

This competence will be our main asset in a few years.

TowerXchange: As this is the first ESCO of scale in SSA, it will be interesting to learn how it is resourced. Please talk us through your organisation chart.

Today we have a team of 35, that will increase as we take on more sites. Each cluster has a dedicated technician and an engineer equipped with spare parts. Each of these were formally trained by our equipment manufacturer’s experts, both theoretical training and on the job training at two or three sites.

Back in the control center we have our GM, our Operational Director, who is effectively the leader of the field technician team, and our Technical Director, who oversees training, the NOC, performance stats, benchmarking and reports. When the technicians escalate an alarm or technical issue, it goes to him.

We also have finance and admin, warehousing and logistics.

Within the mother company, there are a further six people: myself, our CTO, two in business development, a CFO and a Supply Chain Manager.

TowerXchange: It’s notoriously difficult to retain scarce skills in SSA – how are you minimising staff turnover?

Staff retention is a challenge at every level and company. From my previous experience, by creating the right atmosphere and company’s DNA we can keep them motivated and committed to the company.

We are continuously investing in and promoting our people as we believe in our people.

We are very open in our communications – our team can call me anytime – we are quite informal. We’re developing a warm, family environment.

Yes people might leave, but we want to be an employer of choice – for everyone who leaves, two to three other talented people knock on our door.

For our first round of recruitment in Gabon, we were still a new company in the market, but today we’re already getting good CVs from candidates who see we’re serious and committed to the market and the unique technology we used is challenging them.

TowerXchange: We understand Energy Vision is technology agnostic; what technologies are you deploying and why?

In any project we will use at least two or three suppliers to benchmark equipment performance, diesel consumption and after-sales service. So if we have two 1.5kW sites, we have real fuel consumption benchmarks from the field to compare supplier X versus supplier Y – partner selection isn’t about slides and lab test results, but proven results on our own sites. This creates healthy competition, and if suppliers deliver good results, we will keep using them in the future.

At some off-grid sites we are using Flexenclosure with their controller and DGs from Grupel, while at other off-grid sites we are using Ausonia’s all-in-one system with DC DG in one compartment and the DC system in another compartment. With the help of the Norwegian export credit, we use Eltek systems at on-grid and bad-grid sites.

Generally we use off the shelf proven products, with some mechanical strengthening to equipment to prevent theft and sabotage.

We’re using full hybrid solar and CDC batteries. We use as much solar as we can, even though Gabon is not one of the best countries in SSA for solar irradiation, and we’re satisfied with results so far.

We are using RMS aggregated into our own platform in the NOC to see the total network, enabling us to integrate different suppliers in the future.

TowerXchange: What has been the thinking behind deploying relatively capitally intensive, premium energy solutions?

As a serious and responsible company, we selected tier one suppliers that are proven in tough market conditions and tough environments. We have past experience with these suppliers – they are people we know.

We build configurators and evaluate ROI over a ten year period. We know where we expect our suppliers to be, and partner with them to achieve the performance goals necessary to support our business model.

We are cultivating long term relationships with our technology partners – we hope they take up the challenge to support us in our ambitious expansion plans within and beyond Gabon!

TowerXchange: Has the capital outlay and opex per site broadly matched your forecasts so far?

I can confirm that our predictions in terms of capex and opex matched the reality. One important capex element in our TCO and business model is the battery life time, but after two years it is still too early to know how accurate our prediction was, and how accurate the suppliers’ forecasts were compared to reality.

TowerXchange: What is your vision to drive expansion in Gabon and beyond? And how will you finance such growth?

We have good relationships with the MNOs and OEMs in Gabon, and that has fast tracked our entry into the market. We’ll take some of our proven team in Gabon to ramp up in other countries like I did at Leadcom – develop a pool of local African people to support the growth of the company.

In Gabon there are still two MNOs who have their own towers – they are target customers for our proposition. We believe in the potential for further deals in the Gabon market, but in parallel we’re developing discussions with different carriers in different countries.

We will synchronise raising further investment and vendor finance with the growth of the business as we continue to increase capex.

Currently we are finding MNOs more receptive to our vision than towercos, but it’s only a matter of time!

TowerXchange: As one of the pioneers of the ESCO market in Africa, how would you reflect on our progress as an industry over the last two years? Do MNOs and towercos now buy-in to the merits of the ESCO business model?

MNOs are increasingly adopting the ESCO model, whereas towercos for a variety of different reasons have not yet been as receptive. We hope that towercos will realise soon the true benefits that ESCO can provide them. We can see in our daily work and routines how many things can be improved and optimised on every site and system. The fact that we are delivering an SLA of 99.99% is not only because we implement good technology, it is because we are maintaining and monitoring performance constantly. There are so many software parameters to be considered and tuned based on site and equipment configuration that if the power team is not 100% focussed on energy, they will never be able to achieve such a challenging SLA with such low opex.

The market will continue to grow now ESCOs have proved they can do it as well if not better!