Enerdynamic Hybrid Technologies Corp. (formerly MCM Capital One Inc.) (TSX-V: EHT) announced today that its Luxembourg subsidiary, EnerDynamic Luxembourg RL , has entered into an agreement with SOPAM S.A., whereby an entity called Maple Leaf Energy S.A, (“MLE”) was established. MLE is owned equally by EnerDynamic and Sopam and its head office is located in the country of Ivory Coast, Africa.
EnerDynamic and Sopam will jointly contribute €500,000 in capital to launch this venture. MLE will target West Africa, or the Economic Community of West African States (“ECOWAS”), for the sale of its micro hybrid energy line of products (“ENER Product Line”). The ENER Product Line includes micro wind, solar and battery back-up systems packaged for varying power outputs, which can be assembled in approximately one (1) hour. The ENER Product Line can be used by consumers to power homes in remote locations where there is no grid connection or to power a home and distribute power to the grid when the electricity supply exceeds demand. In addition to its sales strategy with respect to the ENER Product Line, MLE intends to distribute third party, high quality renewable energy products from leading manufacturers around the world.
Sopam is a private company established in 1998 in Burkina Faso, which specializes in the installation, operation and maintenance of solar and electric systems within West Africa. Sopam has built numerous turnkey energy projects, including a 56 megawatt thermal power plant in Mali. Sopam’s experience extends to power plant construction, installation/maintenance of power lines and networks, installation of solar panels, generators and industrial equipment through its subsidiaries. Accordingly, Sopam offers local expertise and a network of contacts to EnerDynamic.
John Gamble, CEO of EHT commented that “the success of such a venture relies heavily on our finding the right partner with vast experience and relationships within the region. We would not have undertaken this venture without a partner like Sopam, a recognised and respected industry leader throughout West Africa.”
Pangueba Sogli, President of Sopam said, “West Africa represents a significant market for the EnerDynamic products and Sopam has identified in excess of $20 million of near term market opportunities which could materialize into revenue for MLE. These are early stage opportunities but it is significant that we already have market pull for our products with the initial launch of this joint venture.” Mr. Sogli continued “we have been the leader of development in the West African electrical market for over 20 years and have been looking for a partner like EnerDynamic to bring West Africa into the future with sustainable micro energy solutions. We have identified this market based on its revenue potential over the short and long-term and now have the partner to capitalize on it quickly”.
Paul Ghezzi, President of EHT, stated that, “after an extensive evaluation of the West Africa opportunity, we concluded that there are no other major distributors of micro energy solutions in this region at present, yet the need for reliable local electricity continues to grow significantly. Annual population growth coupled with existing demand for distributed energy solutions and a lack of organized competition presents a window of opportunity for our products and we are well positioned to meet that need immediately.”
MLE plans to establish a wholesale distribution network that will initially consist of distribution centres in six (6) countries: Ivory Coast,Ghana, Senegal, Burkina Faso, Mali and Chad. These warehouse/store-front style locations will allow suppliers and installers of alternative energy systems and products to locally access international quality products through a combination of e-business, telephone ordering and walk up sales. More importantly, these distribution centres will also act as warehousing for the much larger energy projects and volumes that MLE will need to support its intended growth as it draws on the strength of its partner.
MLE will establish a brand of excellence across the ECOWAS region to meet the strong demand for alternative energy supply at the local demand level. Sopam and EnerDynamic are taking a bottom up approach to the market. Mario Zen, Vice President of Business Development of EHT, points out that “MLE will adopt a business model that leverages Sopam’s experience in the West African market by focusing on providing solutions to local problems and building a strong relationship with communities. Bottom-up growth has proven to be a successful strategy throughout Africa and it is the one we will follow.”
The West Africa Opportunity
Distribution of centralized electrical power in the region is problematic as the infrastructure to distribute power outside major city centres is virtually non-existent making the locally distributed power generation model offered by the ENER Product Line ideal for this market.
According to a 2010 report on West Africa economies, more than thirty percent (30%) of electricity used within the urban regions comes from private generators (primarily gasoline consuming) with high operating costs. Each one of these established electricity users is a target consumer of “ENER” products. West Africa as a region is experiencing on average a ten percent (10%) annual growth in GDP but faces impractical multi-billion dollar investments should it wish to establish a western-style electrical grid. The absence of this access to electricity is the definable market for which the ENER Product Line is ideally suited to target the 170 million people of the region that have no access to an electrical grid.
EHT’s business strategy is to offer micro energy products, the Ener Product Line, designed for distributed small-scale power generation; own and operate utility scale projects with long-term contracts and recurring revenue; and supply equipment and installation services to third party projects.