Nigeria to power its telecom towers with solar

From the newsletter

Hotspot, a Nigerian telecom provider, has signed a Memorandum of Understanding with a consortium led by Canada-based smart off-grid company Clear Blue Technologies to deploy 312 solar-powered telecom sites in Nigeria. The partnership brings solar, finance, &  infrastructure expertise to tackle the challenges of powering telecoms.

• The consortium’s value lies in its combined expertise. Clear Blue’s Illumience smart power cuts energy costs by 40% compared to diesel, Empower’s blended-finance model de-risks capital, and Netis’ maintenance network ensures 98% uptime, which is critical for Nigeria’s unreliable grid.

• With 60% of Nigeria’s telecom towers still diesel-dependent, this rollout could save millions of dollars in energy costs. This model could be replicated in other countries reliant on diesel to power their telecom towers, e.g  Ghana (35%) and Kenya (28%).

More details

• The consortium, spearheaded by Clear Blue Technologies, includes Empower New Energy, a clean energy project financier, and Netis, a telecom infrastructure operator. The rollout is targeted for completion by the end of 2025, pending final contract negotiations. 

• Together, the consortium will bring a unique blend of expertise. Clear Blue's Illumience smart power technology promises significant cost savings compared to traditional diesel generators, while Empower New Energy's innovative financing model reduces upfront capital requirements for Hotspot. Netis, a telecom infrastructure operator, will handle site maintenance, ensuring high uptime and operational efficiency.

• The shift towards solar power is particularly crucial in the context of rising fuel prices and the removal of government fuel subsidies in Nigeria. Solar-powered towers reduce reliance on expensive and polluting diesel generators, curbing emissions and stabilising connectivity – a win-win for both the environment and businesses.

• Furthermore, Nigeria's national strategy for energy transition aims to reduce emissions from the telecom sector by 30% by 2030. For a country plagued by frequent power disruptions, shifting to renewable energy sources could yield about $1.4 billion in annual savings for the telecom industry.

• Current industry analyses suggest that Nigeria has between 5,000 and 7,000 telecom sites using solar-hybrid systems out of approximately 30,000 towers. Major players like MTN, Airtel, and IHS Towers are at the forefront of these deployments. However, the majority of towers still depend on diesel generators due to the unreliability of the national grid. The 312 solar hybrid sites represent a 5-6% growth in Nigeria's current solar-powered telecom infrastructure.

• The majority of existing solar-powered telecom towers are operated by large telecom companies or independent tower operators, typically without the involvement of specialised renewable energy financing partners. This consortium, with its unique structure, might increase the chance of success for this project.

• The Hotspot project serves as a proof of concept for a scalable and financially viable model for smaller telecom operators. Its success could encourage wider adoption of solar solutions across the continent.  Many other African nations are also embracing solar energy for telecom towers. In the Democratic Republic of Congo, Orange and Vodacom are establishing solar-powered mobile base stations. Kenya's Safaricom is increasing its reliance on solar, here in Kenya and in Ethiopia as well.

Our take

• Africa’s energy transition needs sector-specific coalitions, not solo acts. Individual firms can’t solve Africa’s energy infrastructure paradox. Clear Blue’s tripartite model (tech + finance + ops) should be replicated in other fossil fuel reliant industries like mining and agriculture, just to name a few.

• Nigeria's removal of fuel subsidies, which led to a sharp increase in diesel costs, has made solar energy a more economically competitive alternative. Solar adoption has since increased. This demonstrates that solar can compete effectively with fossil fuels when subsidies for the latter are removed. Furthermore, adding incentives for solar would further enhance its attractiveness and accelerate its adoption.

• Hotspot's solar-powered telecom sites are a prime example of Africa's broader energy transition. Addressing one challenge, such as powering telecoms, can have a ripple effect, creating opportunities in areas like job creation, finance, and digital inclusion. The key takeaway is to think in terms of interconnected ecosystems rather than isolated projects.