Energy as an Opportunity for Telecom Operators

A Complimentary Business Stream

Energy Poverty is Real

1.2 Billion People are deprived of energy, energy poverty is concentrated into Sub-Saharan Africa and Developing Asia

Energy Poverty Equates to Material Poverty

Energy Poverty is Bad80% of those without access to electricity use a biomass, or other polluting, fuel for cookingIt is estimated that 600,000 people (half of them children under 5) die each year in Sub-Saharan Africa from household air pollution. (Africa Progress Panel)Development of the skilled workforce needed to sustain growth is inhibitedHomework cannot be done in the dark

Industry cannot be developed where energy is unavailable.Potential for the development of agri-business is severely restrictedEconomic, Educational and Social activity is restricted to hours of daylight“On Current Trends, it will take Africa until 2080 to achieve universal access to electricity. Universal access to clean cooking would occur around 100 years later”. (Africa Progress Panel).

The Impact on Telco“Mobile subscriber growth is maturing and could well saturate in the medium term in some markets if rural coverage does not increase”- Deloitte “The Future of Telecoms in Africa”

Profitable growth will be restricted unless access to power is improved

There are Solutions

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Generator solutions result in rural Nigerians paying 48 time as much per kWh as do the inhabitants of ManhattanProne to breakdown, theft and fuel delivery problems

Small household solutions an be usedLack resilience in relation to power storage and maintenance

Hybrid Solar solutions can be a solution for business and some wealthy individualsSolutions can be made resilient, even if expensive

Community Micro-Grid offers the scale to build reliable storage to cover significant periods when power production is not possibleResilient systems can be delivered at a capital cost of <USD1,000 per kWh of available energy

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A Challenge to Telco Operators

• Telecom operators have successfully delivered one massive infrastructure development in providing access to communications. In doing so they have acquired expertise in:• Managing government relations and regulatory matters through a

time when the role of state monopolies is being reduced• Securing vast amounts of foreign direct investment to challenging

markets• Mobilizing resource to deliver on challenging infrastructure build• Establishing resilient billing systems that are effective in, largely,

cash economies• Profitable development of Micro-Grid is well within the organizational

capability of African telco operators

Community Micro-Grid Commercial ModelsEPC- Electric Power Contractor

• Straightforward sale of micro-grid to utility.• Not appropriate to CSR offering

IPP- Independent Power Producer

• Own and operate micro-grid, based on a long concession

• Contract with power utility to sell power produced at agreed tariff

• CSR partner can be anchor customer• CSR can act as seed financing to build a critical

mass for subsequent commercial financingUtility Model • Own and operate micro-grid, based on a long

concession• Sell power to commercial customers at approved

rates• CSR partner can be anchor customer (this model

may be attractive to telcos and other utility market operators who have existing billing technology)

• CSR can act as seed financing to build a critical mass for subsequent commercial financing

Community Micro-Grid Investment

Community Micro-Grid InvestmentNotes:• Cost includes 48 hours battery back up (using Zinc Air which is not

vulnerable to cycle/ operating temperature and DOD solutions)• Generation based on PV array• Design life 20 years• Operational support model in place, financed from income• Reliability of design and community involvement in operating model

encourages “ownership” minimizing theft risk

Appendices

Electrification Rates- Sub-Saharan Africa

Showing only those countries where >10M people have no access to grid electricity

Electrification Rates- Developing Asia

Excludes China & India