In the small village of Kabunyata, in the middle of rural Uganda, 100 households and 20 small businesses have electricity for the first time. The kids have light so they can study in the evening. Fresh water is being pumped in from the local reservoir. It’s a good place to be. This project is the result of a co-operation between the German government’s Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Kirchner Solar Group and Airtel, which uses the mobile phone tower as anchor tenant. It’s working not just for the community but also for the telecommunications industry – opex has been cut by 40%, uptime statistics are impressive, and GIZ is keen to scale the initiative.
TowerXchange: Please introduce our readers to GIZ - where do you fit into the telecoms infrastructure ecosystem?
Markus Exenberger, Programme Director, Energy Programme & Key Account Manager – Mobile Towers: Energy supply in off-grid regions, GIZ:
GIZ is an international enterprise owned by the German Federal Government. We assist the German Government in achieving its objectives in the field of international cooperation as well as sustainable development for developing and emerging countries.
In Uganda, as in many other countries, energy is one of the priority areas of German Development cooperation. Rural electrification is a particular challenge; according to the REA, rural electrification in Uganda is currently at 7%, up from 1% at the beginning of this decade. The government has set a target to improve rural electrification to 22% by 2022.
Villages in remote areas of Uganda might not be connected to the national grid, but many have a mobile mast close by. Most of these isolated masts are powered 24/7 by noisy, often oversized, diesel generators, which contribute significantly to pollution.
TowerXchange: How is GIZ help to improve rural electrification whilst reducing the carbon footprint of rural communications?
Markus Exenberger, GIZ:
It is against this background therefore that a new operating concept, the ‘mobile communication with solar energy’ concept, was initiated in 2012 to help mobile network operators reduce carbon dioxide emissions by 90% as well as cut their operational costs.
In Uganda, GIZ developed a business oriented operating model of solar electrification in collaboration with German partners. With this model, thousands of mobile towers in sub-Sahara Africa could be transformed into ‘solar beacons’, bringing light to remote villages.
We call our approach the ABC-strategy; which means Anchor customer, Business and Community power supply.
By offering turnkey power supply solutions to mobile network operators and tower companies, whilst at the same time selling excess power to communities, we fulfill our development mandate and foster the private sector. Additionally, we contribute to a reduction of carbon footprint by using renewable energy instead of diesel generators
By offering turnkey power supply solutions to mobile network operators and tower companies, whilst at the same time selling excess power to communities, we fulfill our development mandate and foster the private sector. Additionally, we contribute to a reduction of carbon footprint by using renewable energy instead of diesel generators.
TowerXchange: What were the origins of your concept?
Markus Exenberger, GIZ:
We started with a public private partnership project in Uganda about two years ago. Together with our partner Kirchner Solar Group, a German solar industry pioneer, we were commissioned by the German Government to provide an innovative energy solution for rural areas, using a photovoltaic-battery hybrid power supply.
The result has been improved business development in rural areas, while private households have been able to access affordable, modern energy, which in turn results in higher usage of mobile services. Payments, notifications and information are made via a mobile money payment platform.
TowerXchange: What are the next phases for GIZ’s project in Uganda and elsewhere in Africa?
Markus Exenberger, GIZ:
After the successful implementation of pilot sites in Uganda, we want to expand our activities. We believe that we are able to manage a significant number of sites in a reasonable timeframe; for example, ten sites per customer per country.
Soon we will move to the second phase of the project, with 100 sites in Uganda, which should take us less than one year to finish. At the same time we use ODA resources (Official Development Assistance) to set up modern mini-grids according to international standards to distribute the power to SMEs and households.
TowerXchange: Talk to us about the importance of engaging local stakeholders.
Markus Exenberger, GIZ:
We have learned that the key to a successful implementation lays in including community members in our activities. Their ownership is crucial for success and security, making pilferage and theft issues less challenging.
In order to build capacity, we are training local solar technicians, as well as providing training on the productive use of energy and energy saving.
Villagers around the tower benefit from access to affordable modern energy, allowing them to take part in public life via multimedia, allowing their children to read in the evenings, and providing electricity to pump water centrally stored in nearby reservoirs.
It is crucial to cooperate with government and local districts. One has to approach ministries and electricity regulation authorities, and we have to prepare, sensitise and support communities on the way. Being active in the field of development cooperation, GIZ has a lot of experience in cooperating with all kinds of authorities.
TowerXchange: What is your rollout plan now, what are the next steps and what is your long term vision?
Markus Exenberger, GIZ:
We are engaging with a number of capable investors, power utilities and Power Supply Unit (PSU) manufacturers to be able to satisfy any demand in a reasonable timeframe. We intend to cooperate with a significant portfolio of partners.
Our anchor tenant Airtel Uganda has a further 180 off-grid sites where they want to deploy hybrid or solar power, and we’ve identified 100 in the vicinity of villages in which a similar solution can be installed
Our anchor tenant Airtel Uganda has a further 180 off-grid sites where they want to deploy hybrid or solar power, and we’ve identified 100 in the vicinity of villages in which a similar solution can be installed. We are also approaching mobile network operators and tower companies elsewhere in East and Southeast African like Kenya, Tanzania, Rwanda, Zambia and Malawi, but we are always open to all other countries within sub-Saharan Africa and even beyond.
TowerXchange: What is GIZ’s business model and how does it differ from other renewable energy service companies (RESCO) solutions in the market?
Markus Exenberger, GIZ:
Our business model is a pure opex model in which we provide the entire initial investment for a turnkey power solution, including security, remote monitoring systems and operations & maintenance.
The mobile network operator pays for the power supplied on a defined PPA (Power Purchase Agreement) rate per month subject to a long term contract. Depending on the local diesel prices, there will be significant reduction in opex costs made possible by decreasing diesel fuel and transport costs. We can also create economies of scale for renewable energy components and battery manufacturers by addressing many African countries at the same time and identifying and supplying to as many site locations as possible. In fact, this is a classical win-win situation for all stakeholders involved and we believe this is the way to a large-scale energy development.
We deliberately chose PSUs with enough capacity to also feed into the mini-grid, so that local businesses and households benefit too. Tariffs will differ depending on power required. For example, households for example pay a so-called lifeline tariff, which is below what is spent on energy costs per month for kerosene, dry batteries and candles. This tariff allows them to have enough power for up to three energy saver bulbs, a radio and a cell phone charger. The charging costs for mobile appliances can be cut by more than 90% compared to the current situation in which people have to walk to a charging shop using small generators. Automatically, this leads to more usage for mobile services. And customers can conveniently pay via mobile money.
TowerXchange: Tell us about the power solutions you’ve used.
Markus Exenberger, GIZ:
Kirchner Solar Group owns and operates the solar solution, selling power to Airtel and to the community. Our pilot site has an installed capacity of 10kWp of solar energy at the mobile tower, plus 20kWp for the electrification of the village. A mini-grid was installed in May 2013, requiring 5.5km of transmission lines (100 masts) costing around €10k per km.
Most importantly, we have provided power to 100 households, 5 social institutions and 20 SMEs in the village, including the local school and maize mill
As we rollout the initiative, we are currently thinking of using energy containers using a PV/Battery Hybrid. Depending on load demand and the number of tenants on the site, there can be ground-mounted solar arrays as well as other renewable energy sources. A diesel backup has to be installed for redundancy purposes only.
TowerXchange: Finally, what is the value proposition for the telecom tower industry to partner with GIZ and accelerate the rollout of this initiative?
Markus Exenberger, GIZ:
Having a mobile network operator as an anchor customer makes each site ‘bankable’, and we feel the initiative provides a compelling proposition for MNOs and for independent tower companies.
Fourteen months into our pilot in Kabunyata in the Luwero district of Uganda, we have:
Incurred zero diesel expenses
Cut anchor tenant Airtel’s opex by 40%
Achieved 99.96% uptime (the only outage was when an inverter got wet during horizontal rain last Christmas!)
Most importantly, we have provided power to 100 households, 5 social institutions and 20 SMEs in the village, including the local school and maize mill.
