Eliminating Energy Poverty and riding the next growth wave

1. Energy as an Opportunity for
Telecom Operators
A Complimentary Business Stream

2. Energy Poverty is Real
SOURCE: IEA, World Energy Outlook 2015
Region
Population without
electricity
millions
Electrification rate
%
Urban
electrification rate
%
Rural
electrification rate
%
Developing countries 1,200 78% 92% 67%
Africa 635 43% 68% 26%
North Africa 1 99% 100% 99%
Sub-Saharan Africa 634 32% 59% 17%
Developing Asia 526 86% 96% 78%
China 1 100% 100% 100%
India 237 81% 96% 74%
Latin America 22 95% 98% 85%
Middle East 17 92% 98% 79%
Transition economies & OECD 1 100% 100% 100%
WORLD 1,201 83% 95% 70%
Electricity access in 2013 - Regional aggregates
1.2 Billion People are deprived of energy, energy poverty is concentrated into
Sub-Saharan Africa and Developing Asia

3. Energy Poverty Equates to Material
Poverty

4. Energy Poverty is Bad
80% of those without access to electricity use a biomass,
or other polluting, fuel for cooking
It 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 inhibited
Homework cannot be done in the dark
Industry cannot be developed where energy is
unavailable.
Potential for the development of agri-business is
severely restricted
Economic, 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).

5. 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

6. There are Solutions
?
✔
✔
Generator solutions result in rural Nigerians paying 48 time as
much per kWh as do the inhabitants of Manhattan
Prone to breakdown, theft and fuel delivery problems
Small household solutions an be used
Lack resilience in relation to power storage and maintenance
Hybrid Solar solutions can be a solution for business and some
wealthy individuals
Solutions 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 possible
Resilient systems can be delivered at a capital cost of
<USD1,000 per kWh of available energy
✖

7. 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

8. Community Micro-Grid Commercial
Models
EPC- 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 financing
Utility 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

9. Community Micro-Grid Investment
Nominal kW power 26.4 52.8 105.6 211.2
Power Autonomy hrs 48 48 48 48
Daily Household Consumption kWh kwH 0.65 0.65 0.65 0.65
Households # 138 276 550 1097
Average people/ household # 7 7 7 7
People Served # 966 1932 3850 7679
IPP Model
Capex USDk 194.80 380.42 754.95 1,501.03
Capex per kWh USD 876 861 857 854
Capex per Person USD 202 197 196 195
People Served per USDm Invested # 4959 5079 5100 5116
Utility Model
Capex USDk 234.94 434.34 862.65 1,716.06
Capex per kWh available energy USD 1057 983 979 977
Capex per Person USD 243 225 224 223
People Served per USDm Invested # 4112 4448 4463 4475
Village Power Options

10. Community Micro-Grid Investment
Notes:
• 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

11. Appendices

12. Electrification Rates- Sub-Saharan
AfricaSOURCE: IEA, World Energy Outlook 2015
Region
Population without
electricity
millions
National
electrification rate
%
Urban
electrification rate
%
Rural
electrification rate
%
Total 634 32% 59% 17%
Nigeria 96 45% 55% 37%
Ethiopia 71 24% 85% 10%
Democratic Republic of Congo 61 9% 19% 2%
Tanzania 37 24% 71% 4%
Kenya 35 20% 60% 7%
Uganda 32 15% 55% 7%
Sudan 25 35% 63% 21%
Madagascar 20 15% 37% 4%
Mozambique 16 39% 66% 27%
Niger 15 15% 62% 4%
Angola 15 30% 46% 18%
Côte d'Ivoire 15 26% 42% 8%
Malawi 15 9% 32% 4%
Burkina Faso 14 17% 56% 1%
Chad 12 4% 14% 1%
Mali 11 26% 53% 9%
South Sudan 11 1% 4% 0%
Zambia 11 26% 45% 14%
Cameroon 10 55% 88% 17%
Burundi 10 5% 28% 2%
Electricity access in Sub- Saharan Africa - 2013
Showing only those countries where >10M people have no access to grid electricity

13. Electrification Rates- Developing Asia
SOURCE: IEA, World Energy Outlook 2015
Region
Population without
electricity
millions
National electrification
rate
%
Urban
electrification rate
%
Rural
electrification rate
%
Electricity access in Developing Asia - 2013
Southeast Asia 120 81% 94% 69%
Brunei 0 100% 100% 99%
Cambodia 10 34% 97% 18%
Indonesia 49 81% 94% 66%
Laos 1 87% 97% 82%
Malaysia 0 100% 100% 99%
Myanmar 36 32% 60% 18%
Philippines 21 79% 94% 67%
Singapore 0 100% 100% 100%
Thailand 1 99% 100% 98%
Vietnam 3 97% 99% 96%
Rest of developing Asia 168 65% 86% 53%
Bangladesh 60 62% 90% 48%
DPR Korea 18 26% 36% 11%
Mongolia 0 90% 98% 73%
Nepal 7 76% 97% 72%
Pakistan 50 73% 91% 62%
Sri Lanka 1 94% 99% 93%
Other Asia 31 28% 74% 12%
Excludes China & India