Why ESCO works for CALA

Aktivco has over 3,000 sites under management in 5 countries, what can it teach CALA MNOs and towercos about energy?

Read this article to learn:

  • Who are Camusat and Aktivco?
  • How ESCO contracts work
  • How ESCO can help in good and bad grid markets
  • Next steps in CALA for the ESCO model

Camusat Group are one of the leading ESCOs globally, with five markets and over 3,000 sites in Africa. ESCOs, or Energy Service Companies, are increasingly targeting MNOs and towercos in CALA. In the region many areas remain without reliable grid, and where grid power is available it can be expensive. Plus carbon emission considerations are leading operators to look again at their operations. Aktivco, Camusat’s investment arm and ESCO brand, has recently began operations in Cameroon for Orange and will be speaking with TowerXchange about how the lessons learned in Africa can be applied in CALA,

TowerXchange: Could you please re-introduce Aktivco and yourself to our CALA readers?

Thibaut de Rodellec, CEO, Aktivco, Camusat:

Camusat Group, one of the market leaders in the implementation of telecom infrastructures and one of the most experienced network developers in the world, has completed its expertise by launching an in-house investment vehicle – Aktivco – to answer the telecom sector’s need to outsource its energy infrastructure and focus on their core business. Aktivco holds and manages energy assets over a long period of time relying on Camusat’s operational capacity and high level of expertise in managed services.

Aktivco is leading the ESCO market in Africa with five on-going contracts and more than 3,000 telecom sites supplied with its energy in portfolio. At the end of 2021, Aktivco will have invested more than €100mn in this activity.

TowerXchange: What is an ESCO and how does it operate?

Thibaut de Rodellec, CEO, Aktivco, Camusat:

An ESCO (Energy Service Company), refers to a business model based on ownership and management of energy infrastructure aiming to reduce the operating and energy costs of an operator as well as increase its network availability and therefor its network performance.

These financial and technical improvements for the operator come together with a strong carbon footprint reduction on its network helping him to meet its environmental commitments. Operators’ capex and constant increasing opex are replaced by a fix monthly fee that covers the investment in new equipment and services, any cost of operation as well as fuel and grid consumption. The operator benefits from one single point of contact with regard to all operations related to the technical environment.

TowerXchange: What are the typical characteristics of an ESCO contract?

Thibaut de Rodellec, CEO, Aktivco, Camusat:

For Camusat, the key characteristics of an ESCO are its long-term nature. Contracts should be between 10-15 years which allows the ESCO (instead of the operator) to invest in modernisation capex for existing equipment and in new technologies. Payment will be based on fixed monthly fees including fuel and grid consumption and performance will be measured against a Service Level Agreement (SLA) and network availability. This model offers visibility and predictability of energy cost and infrastructure network performance.

ESCO projects also have a strong CSR dimension. The massive solarisation of our sites made possible reductions in fuel consumption of up to 90% on average; so less CO2 emission. Less consumption means fewer maintenance visits, so again less CO2 from operations, less consumables to be recycled and finally a reduction in pollution linked to transport on site. Our ESCO projects also fully contribute to our social and community commitments as we create sustainable jobs and provide training for local people internally and within the organizations of our supplier and contractor partners.

TowerXchange: Congratulations on starting operations in Cameroon and reaching your 3,000th site under management – what can you tell us about your plans in Cameroon? 

Thibaut de Rodellec, CEO, Aktivco, Camusat:

Thank you! Indeed, we are proud to add this fifth country on our Aktivco map.  It is an additional proof that this business model makes a lot of sense for operators. Our first target is upgrading the existing network in order to increase availability and quality of service for Orange.

As we consider that ESCOs should be energy efficiency drivers, we plan to drastically increase the green energy ratio through hybridisation and deployment of renewable solutions. Even if the country presents certain challenging particularities such as difficult geography & meteorological conditions with its mix of jungle and deserts, flooding areas which result in difficult access to the sites, we have wide knowledge and experience thanks to our long-term local operational presence. Our customer is assured of our high performance in operating the energy infrastructure during the contract duration. This will support further organic growth by financing all new sites to integrate them in our ESCO contract.

TowerXchange: The African and CALA cell site power markets are very different, but what lessons can you apply from your work there? What kind of savings have you delivered in your existing African markets?

Thibaut de Rodellec, CEO, Aktivco, Camusat:

Camusat is not a newcomer in CALA market. Since 2000 we have had an operational presence in the region on different business lines with both operators and tower companies; this is a huge advantage for us. Our existing experience and feedback from our 3,000 sites in our ESCO projects help us in proposing the best design solutions for our customers in the CALA region.

We have offered more than 30% savings on average in terms of TCO for the operators in our ESCO projects.  Our solutions are reliable, TCO-wise very competitive, significantly decrease opex (in terms of grid charges & fuel), including consistent optimisation of the O&M operations by reducing the number of visits. Thus over 10 years we obtain higher financial rewards for our customers and thus for us.

TowerXchange: Please share your plans with regards to Group Camusat expansion across Latin America.

Thibaut de Rodellec, CEO, Aktivco, Camusat:

Our ambition is to develop ESCO projects in countries where we have an operational presence or where our clients need us. Following this approach, there are many countries in Latin/Central America in which we are assessing the potential of an ESCO project. ESCO is a key driver of our strategy and we see an excellent environment for the ESCO model in many of the countries of the region; challenging grid environments, either due to poor availability or high cost, good solar irradiation and complex field operations.

TowerXchange: Should the ESCO model be considered only for tower portfolios where the majority of sites are on unreliable grid connections or off grid all together, or can you create efficiencies in the management of good grid sites as well?

Thibaut de Rodellec, CEO, Aktivco, Camusat:

Today we have ESCO operations in countries where we have both good and bad grid situations. In terms of business case, when the grid is highly unreliable or not present, the business model relies on fuel & operation costs savings and is clearly understandable for all parties.

In the situation of a good grid country, the approach will be focused on back-up management optimisation and grid costs savings. As we have seen a significant increase in grid cost in all countries in the world and having in mind the estimations made by all analysts regarding the significant grid cost increase in the coming years, working with an ESCO is a wonderful strategy for operators to hedge their energy cost. Adding PV panels would help reducing the consumption and therefore the dependency of the grid network.

TowerXchange: TowerXchange are tracking several ongoing and imminent ESCO RFPs globally – what’s your view of the pipeline of potential new contracts? What targets have you set yourselves in terms of new business development in the coming year?

Thibaut de Rodellec, CEO, Aktivco, Camusat:

There is a huge potential pipeline in Central & Latin America countries today. Several operators are working on the ESCO approach to increase their quality of network, reduce their grid power costs and also meet their CSR commitments.

Not all operators have the same maturity towards the model, but at least two of them in the region will launch RFPs in the coming months. We are already in discussion with them and we are convinced that as in Africa, once the first deal will be closed, there will be a strong demand for those projects.

Let’s do not forget that the ESCO value proposition should be seen as a no brainer for operators: uptime increase, TCO decrease, strong reduction of fuel/grid consumption allowing them to meet their CSR targets.

Carbon footprint reduction is a part of the equation which is accelerating the move to optimised green energy solutions.

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