DEG financing to safeguard telecommunications in Africa and Middle East
Press Release from 2019-10-02 / DEG
Long-term loan for IPT Powertech Group
Mobile telecommunication is part and parcel of everyday life. Reliable, constantly available online connections would not be possible if the required infrastructure is not developed. For this reason, Lebanese firm IPT Powertech Group SAL (IPT) is investing in decentralised energy solutions for mobile network operators in Africa and the Middle East. DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, is providing a long-term loan totalling USD 25 million to IPT. Further investors are Proparco and Finnfund, which provide USD 20 and USD 10 million respectively; the loan from the EDFI member institutions is syndicated by DEG. Another co-investor is the European Investment Bank (EIB), which is investing a further USD 60 million.
IPT specialises in supplying power to the telecommunication towers. It operates more than 30,000 towers from different providers in 11 countries in Africa and the Middle East. In many developing countries, telecommunication towers are not connected to the public power grid but are supplied directly with electricity, usually from diesel generators.
Sustainable power supply for telecommunication towers
Going forward, IPT will make power generation more efficient and more sustainable, using solar power and state-of-the-art storage media, for example. Batteries will store excess power so that green energy is available and can be used at any time of the day. In total, it is expected that around 40% of the energy required to date and about 115,000 tons of CO2 emissions per year will be saved as a result.
To this end, IPT will take over a large part of the energy systems from the mobile network operators, modernise them and sell the electricity back to the mobile network operators on the basis of long term supply agreements. Currently, IPT already operates 4,500 telecommunication towers according to the TESCO (Telecom Energy Service Company) model. A further 1,000 towers will be added under the project.
Approximately 2,000 new jobs
IPT currently employs 4,500 people, with 2,000 further direct and indirect jobs being created or secured as a result of the forthcoming investment.
On the occasion of the contract signing, Monika Beck, member of DEG's Management Board, commented: "We are happy to accompany IPT in the sustainable development of its business model. We believe in a long-term partnership that will add value for both sides. We are also pleased that storage media made in Germany will be used for the telecommunication towers in the future."
Nabil Haddad, CEO of IPT Group, said: “This transaction is the cornerstone for a solid, long-term relationship with DEG, Finfund, Proparco and EIB. It will enable IPT to further transform the telecom industry into a more sustainable and greener sector by providing our state of the art solutions.”
Financing for telecommunications and renewable energy is one of the areas that DEG focusses on. The energy producers co-financed by DEG in 2018 will reach an annual capacity of around 1,730 MW when set up, through hydropower, wind and solar energy as well as geothermal energy.