Abdou Poulho Sow, sales director, West and Central Africa, Altaaqa Global Energy Services talks to African Review about the merits of using the Build-Own-Operate-Transfer (BOOT) model for short- and medium-term power projects
Altaaqa Global Energy Services has introduced Build-Own-Operate-Transfer (BOOT) model to short- and medium-term power projects after noticing a gap in the energy market.
BOOT is traditionally used in the IPP space for longer term contracts, with rental normally being the primary option available for short-term and medium-term projects. Going the rental route means that the temporary power plants are demobilised or equipment is returned to the power provider’s yard at the end of a contract.
Clients are then faced with the limited prospect of signing a new contract at a higher price if they choose to hire the plant or equipment again in the future. Last year, Altaaqa Global started offering its clients an alternative solution to the rental model, proposing BOOT for short- and medium-term projects, which allows for the transfer of ownership of the power plant asset at the end of the contract, requiring no upfront or balloon payment.
Impressively, Altaaqa Global now has several power plants on the BOOT model in place across West Africa, Latin America and Eurasia and hopes more public and private off-takers will take advantage of this unique offering.
“Since we started proposing BOOT in 2019, it has gained the attention of our existing clients and new customers too, which is very encouraging for us. Being a pioneering offering in the context of short- and medium-term contracts, we see that there are still more people that we need to educate about BOOT and its potential benefits to their business operations,” said Abdou Poulho Sow, sales director – West and Central Africa.
He said in West and Central Africa, it is highly important for mining, manufacturing and industrial applications due to the fact it reduces financial and technical risks and eliminates the need to make upfront payments.
“In the African context, BOOT will make a real difference,” Sow continued. “A company will be able to see that they can duplicate the BOOT model in other countries where they have plants and other mines. For example, once the customer owns the plant at the end of the contract, they could then either keep the power plant as back-up to maintenance, for peaking requirements, future growth or, more importantly, transfer it to other mine sites at minimum cost to the mine owner.
“They will understand that this can be implemented in a wide range of territories and applications, helping them to progress and grow their core business, while we take care of their energy needs in all aspects − 24 hours, seven days a week.”
Benefits
There are many benefits of the BOOT model for clients with short- or medium-term projects. Namely, Altaaqa Global can assume the financial and technical risks associated with a power project. They are able to confidently offer this because they are a company with a strong financial performance and support from their parent company Zahid Group, and because their in-house team of plant engineers and technicians are highly trained and qualified to operate multi-megawatt power plants running on a variety of fuels.
Through the BOOT model, Altaaqa Global will finance, design, build, own, operate and maintain the power plant, while the client pays for the cost of energy and Altaaqa Global’s services at regular intervals. Altaaqa Global’s power plants comprise state-of-the-art and cost-efficient power generation technologies that dramatically lower the total cost of ownership.
“In the long run, our customers are saving significant sums of money in fuel thanks to the latest technologies that make up our plants. Whether it be gas, diesel oil or heavy fuel oil, the efficiency rate is around 44 per cent, which is very good compared to the industry in general,” said Sow.
From an operations and maintenance (O&M) perspective, Altaaqa Global’s plants are run and maintained by highly trained engineers and technicians to ensure efficiency and reliability.
“O&M is an integral part of our offering, and it is what makes our BOOT proposition unique. It is a fully integrated solution that responds to our clients’ needs from all aspects – financial, technical and operational,” Sow said.
He continued, “We have seen some customers who have had to replace very expensive equipment in less than six months or a year due to the fact they face power and voltage variation, which has a negative impact on the daily operations of their equipment. With our solutions, they have this assurance of 100 per cent power availability.”
Long-term partnership
Clients, also looking for a longer term solution, can continue their partnership with Altaaqa Global even as the contract expires, should they require technical training or O&M support.
“The BOOT model provides us an opportunity to have a continuous relationship between our clients after a contract ends. We can continue training their staff, or operating, monitoring and servicing the power plant installation. We may also offer spare parts assistance or a complete overhaul. Overall, it is a flexible solution, helping their economic development – it’s a win-win situation,” said Poulho Sow.
New mining customers from West and Central Africa are already keen to implement these BOOT solutions following discussions with the Altaaqa Global Energy Services team during Investing in African Mining Indaba in Cape Town in February.
“These projects are going to be up and running in six months to a year’s time. We have the opportunity to offer them a unique solution, which gives them peace of mind and is going to make a real difference to what they are used to.”
