Camusat’s Aktivco: ESCO pioneers target 10,000 sites by 2023

Camusat is one of the global leaders in the telecom infrastructure service industry with over 2,900 employees and operations across five continents working on five business lines including site construction and installation, power systems and renewable energy, active equipment installation, fixed and fibre networks deployment and managed services. In 2017, Camusat formed Aktivco, its in-house financial vehicle with capabilities to deploy its investments in energy as a service (ESCO) projects. In this interview, Thibaut de Rodellec, Deputy CEO of Camusat shares with us a substantial update on Aktivco’s development and future vision.

TowerXchange: What are Camusat’s strengths? And why should MNOs and towercos select you as a partner?

Camusat Group is a market leader in the implementation of telecom infrastructures and one of the most experienced companies in fixed and mobile network deployment. Our speciality is to support  telecom actors to efficiently build and optimise  their network development with the very latest telecom technologies through our operational  company Camusat Opco on one hand, and, on the other hand, to offer them energy infrastructure outsourcing solutions thanks to our dedicated investment vehicle, Aktivco.

This integrated approach combining a full scope of telecom services for operators (both MNOs and towercos) together with energy services is unique and is the founding principle of our ESCO offer.

TowerXchange: Aktivco has been a pioneer of the ESCO business model in Sub-Saharan Africa – please tell us about the scale and progress of your operations on the continent to date.

In 2017, Aktivco signed its first ESCO with Tigo in Chad for more than 500 sites. Since then, we added three further contracts signed with Orange subsidiaries in Niger, Burkina Faso and Ivory Coast.

With now more than 2,000 sites under our ESCO model at end of June and the perspective to sign two more contracts by the end of 2019 for 1,000 additional sites, our development is going to accelerate in the coming months in Africa.

At the same time, we have successfully completed our first debt raising last February which strengthens our approach and positioning in the ESCO market. We are very much willing to implement such a model all over the Camusat footprint where it makes the most sense.

TowerXchange: Can you share some anecdotes illustrating your success to date?

Our performance in terms of uptime is of course confidential and we cannot disclose any specific data on our clients network performance.

But still, two easily understandable indicators demonstrate the success of our model. First, we have not paid any significant penalties on any of our four contracts, despite having to achieve very high performance in terms of uptime. Second, every new site built by our clients over the past two years has been included in our ESCO contracts.

It seems that our ESCO performance are on track with what is expected from our counterparts.

TowerXchange: At the cell sites which you have taken over to date, what has been the typical timetable for upgrading energy equipment? For example, is a lot of the legacy equipment on sites ‘fit for purpose’, such that you can sweat the assets to the end of their natural lifecycle, or have you generally had to undertake substantial replacement of energy equipment soon after taking over the sites?

The timetable for upgrading the energy equipment relies mainly on the ESCO deployment preparation. This is a function of capex strategy and operations structuration. Indeed, to deliver the expected performance in terms of uptime on an existing site we need to undertake a significant and robust upgrade of the monitoring and regulation systems and some reinforcement of back-up systems.

From our point of view, the re-usage of the existing energy equipment does not impact the timetable of the deployment, even if it makes it more complex. It is just a part of an equation proposed by our clients where Total Cost of Ownership (TCO) effectiveness needs to be maximised and uptime increased in a short period of time.

Most of the time in the last two years, we have been able to upgrade between 40 and 60 sites per month.

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

Of course, the investment (and savings) for on-grid sites isn’t the same as that generated by off-grid ones. Thus the model in terms of economics is not exactly the same from an ESCO model perspective with off grid sites where power generation is the key issue compared to an ESCO model with on-grid sites where back-up management is critical.

We believe that both type of sites, whether off grid or on grid, need efficient operations and maintenance. As long as they need O&M, it makes sense to have them under an ESCO model.

In Africa, 30% of the sites we manage are on-grid and for those, we are able to provide backup solutions plus solar (if possible) that optimise energy consumption and monitor the efficiency of the site. In fact, most of those sites and their power operations weren’t optimally managed. Consumption was often too high or the selected backup wasn’t right.

TowerXchange: How do you see the ecosystem of different stakeholders evolving, particularly as towercos own an increasing proportion of the world’s cell sites? Should ESCOs have a direct relationship with the towerco and/or the MNO? Should the uptime SLA be “back to backed” from the towerco to the ESCO? How do we ensure contracts make sense for all parties and are enforeceable?

We see no difficulty in collaborating with towercos. Our understanding is that towercos see energy as an upside they don’t want to share with ESCOs companies. However, we are convinced that one cannot maximise upside on the energy without operations excellence, which is Camusat DNA. We would be very happy to negotiate with any towercos in Africa like we do elsewhere in the world.

From a contractual perspective, we see no difficulty in having whether a three-parties contract with the MNO and the towercos, or a back to back contract on energy services.

TowerXchange: TowerXchange are tracking several ongoing and imminent ESCO RFPs in SSA – 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?

There is a huge pipeline of potential new contracts with several MNOs today. All of them do not have the same maturity in terms of familiarity with the ESCO business model, but we believe that the commitment they are taking in terms of carbon footprint reduction and the need to reduce their cost of operations should increase the number of opportunities over the continent.

Regarding our ambition, we are still targeting 10,000 sites by the end of 2023, of which at least two thirds in Africa.