Canadian firm, WATT signs N7.2b investment deal with tower firm PAT
By Kokumo Goodie, Lagos, Nigeria
Pan African Towers (PAT) and a Canadian firm, WATT Renewable Corporation, have signed an infrastructure investment financing agreement to address the energy needs of Nigeria’s telecoms industry.
Chief Operating Officer and founder, WATT Renewable Corporation, Oluwole Eweje, said it is an infrastructure based partnership in which his firm will provide power supply to the tower firm.
Eweje said power accounts for about 70 per cent of the firm’s operating cost (opex), adding that the mandate of WATT is to provide between 40 and 50 per cent savings on opex.
“So part of what we are doing is we are using a combination of technology and conventional energy sources to provide power to offtaker which is PAT. The offshoot of all of these is the socio-economic component of what we are doing. We are not just providig power to the business, part of what we are doing is is that we are looking at using that as anchor station so that we can provide power to businesses within the country which currently do not have power, “ Eweje said on the sideline of the signing ceremony in Lagos.
He said the partnership has been in the works for about a year before the final signing of the deal.
He said investors have committed to spending about N7.2billion on the project. “We are looking at over $20 million that would be spent on the project,” he added.
Director, Investor Relations at WATT Renewable Corporation, Sherisse Alexander, said PAT is not only going to be assisted in its business model but in terms of providing it with mini-grids that will be deployed.
According to her, this will translate to the growth of the communities because businesses in the communities will be able to power their operations. This she said, will trickle down in terms of the socio-economic impact it will have on the entire value chain.
For CEO, Pan African Towers Limited, Wole Abu, the ceremony is a significant milestone in the firm’s pursuit of innovation, service delivery and pushing the country to achievement of the Federal Government’s National Broadband Plan which informed the licensing of infrastructure firms by the NCC.
According to him, there will be reduction in OPEX and improve end user experience of service quality. According to him, 70 per cent of problems associated with service quality could be traced to power related disruptions.
He said: “Quality of service, I am sure you suffer from one challenge or the other. Do you know that 70 per cent those drop calls can be traced to sdisruptions either they ran out of diesel or the generator has a problem or they stole the generator.”
He said the firm plans to hit its target of erecting 2000 towers in areas where it has presence in Nigeria and other African countries.
PAT, which prides itself as innovative player in the market has concluded arrangements to grow its initial tower portfolio from an existing 850 towers to 2000 towers across the West African sub-region, with most of the discussions at advanced stages.
In sub-Saharan Africa alone, several telecom towers are still being managed in-house by Mobile Network Operators (MNOs). PAT said it has mapped out a strategic growth plan to acquire and manage to lease over 2000 towers in the next twelve months in Nigeria and three other African countries. The growth plan will see PAT becoming a major player among independent towers companies and equally make it the fastest growing a feat that took many TowerCos years to attain, with many MNOs already looking in the way of tower divestment and infrastructure sharing.
PAT has positioned itself to strategically take advantage of the infrastructure gap in the African tower industry. Industry experts have revealed that only a quarter of the tower sites in the African market is being managed by independent tower companies. MNOs and other ISPs alone do not have the capacity for the multi-billion-dollar investment outlay that is required for providing this infrastructure, as well as the attendant efficiency, this provides for investors an investible market in the African tower market and recent tower deals have proved that independent tower companies do a better job of managing towers than the MNOs from which they were acquired.