Energy Vision: the first ESCO of scale in SSA

MNOs in Africa seeking to reduce operational complexity have to date tended to focus on strategic partnerships with tower companies. 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 are currently managing the first 50 of what will become over 400 towers, 30% of which are off grid. To find out more, TowerXchange spoke to our old friend Ofer Ahiraz, who readers will recognise as former CEO of Leadcom, who is now Co-founder and CEO of Energy Vision.

TowerXchange: Please introduce Energy Vision to our readers.

Founded four years ago, Energy Vision is an Energy Services Company, or ESCO/RESCO, providing Energy as a service on a pure opex model with zero capex to MNOs and towercos currently focusing on the African telecoms market. Our team has many years of experience in the telecom market from business sectors including at an MNO, a towerco, turnkey provider, and a network and infrastructure engineering company.

Our vision is simple: to offer MNOs or towercos reliable energy at a reasonable, predictable, fixed monthly price. We deploy the capex to modernise sites’ power systems to the latest green technology including RMS, and undertake maintenance, upgrades and refuelling to offer reliable and with highh availability -48VDC to power telecom equipment.

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 was 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. The SLA KPI we achieve on a monthly basis is 99.99%. This partnership relieves the MNO of the financial burden to investment 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 more than 20 years. Prior to my time at Leadcom, I worked for 18 years for Motorola and in the early 90’s we were rolling out OPT Gabon’s analogue cellular network.

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

The scope of project will include over 400 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 one of our partners Eltek.

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

We have 280 sites running our equipment (full hybrid outdoor systems, most with solar) connected to our NOC via Remote Monitoring System (RMS). We are successfully delivering against a 99.99% uptime service level agreement (12 month average) and for the last six months, Energy Vision has also been awarded responsibility for management of all passive elements of the sites – towers, fences, structures et cetera.

We have already driven DG runtime on some sites down from 24 to 1.8 hours per day. 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: 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 30% off grid and a further 20% on bad grid connections, where more than six hours of grid power is not usable. 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 take us through your organisation chart.

Today we have a team of 25, but 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 centre 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 – our headcount will be 35+ once we take over all the sites.

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 will you minimise 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 will invest in and promote 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 build 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 are 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 on/bad-grid sites.

Generally we prefer to use proven technology and solutions, adding 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 not one of the best countries in SSA for solar irradiation, and we’re satisfied with results so far.

We are using integrated RMS aggregated into our own platform in the NOC to see the total network, enabling us to integrate different suppliers in the future. We wanted to avoid the finger-pointing and blame game that comes with using third party RMS! In phase two we will collect and group information into a master NOC platform.

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, long and extensive business relations with those suppliers.

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: 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 hope by Q1 2017 we will have a second country in our portfolio, and we’re targeting a third country before the end of 2017.

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 – the market will come once ESCOs prove they can do it as well if not better!

Energy Vision are sponsors of the 5th Annual TowerXchange Meetup Africa & Middle East, being held on 3-4 October at the Sandton Convention Centre, Johannesburg. Visit the website for more information