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TABLE OF CONTENT

Nama Group Achievements 03

Sustainability 11

Customer Service 16

NG Financial & Operational Performance 23

Renewable Energy 33

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Nama Group Achievements

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Eng. Omar Al WuhaibiCEO of Nama Group

Oman Daily Arabic Newspaper

· Customer-base grew from 500,000 to 1,200,000 customers.

· RO 2.7 billion attracted as direct foreign investment in electricity generation, bringing in a RO 400 million investment in In-Country Value (ICV) and creating more than 1,000 jobs.

· RO 400 million from electricity companies IPOs added to Muscat Securities Market (MSM).

· RO 3 billion from corporate profits and direct borrowing invested in developing transmission and distribution networks.

· Installed generation capacity increased from 2.9 GW to 8 GW, avoiding scheduled network interruptions in the summer.

· Demand peak nearly tripled from 2.7 GW to 6.9 GW

· The efficiency of gas-generated electricity increased by 38%.

· Network electricity loss decreased from 24.6% to 8.8%, saving approximately RO 200 million.

· Electricity cost decreased from 38 baiza/kWh to 31 baiza/kWh.

· Transmission network size increased from 2702 km in 2006 to 6682 km in 2017.

· Transmission network reliability increased to 99% around the year, directly reducing network interruptions.

· Units sold increased from 9517 MWh to 32349 MWh, with an annual growth rate of 10%.

· Sector gained the trust of international investors, thanks to clear laws, regulatory frameworks and high transparency.

· Following the sector’s outstanding performance, 16 international companies expressed their interest in the privatization of Muscat Electricity Distribution Company and Oman Electricity Transmission Company .

· Customer satisfaction average increased to 78% as a result of NG’s investments to improve customer experience related to electricity services.

· 97% of complaints timely resolved in accordance with applicable regulations.

· Electricity sector achievements were the result of the dedication, capabilities and competencies of Omani professionals, accounting for 92% of NG’s workforce.

· Customer service is our highest priority and we measure our costumers’ satisfaction every 3 months. Complaints fell below 0.5%.

Eng. Omar Al Wahaibi, CEO of Nama Group (NG), said that two NG companies will be privatized this year, in a plan aimed at privatizing 5 electricity transmission and distribution companies. The two companies are Muscat Electricity Distribution and Oman Electricity Transmission.

In an interview with “Oman”, Al Wahaibi said that more than 16 international companies have expressed interest in participating in the privatization project. Their applications were received by NG and are currently under evaluation. This underlines the confidence in the electricity sector and credibility it has, thanks to clear laws, robust regulatory frameworks and high transparency.

Al Wahaibi added that subscription will take place at a later stage as per applicable procedures.

Moreover, he pointed out that the size of foreign investment attracted in electricity generation

NG’S NETWORK RELIABILITY UNTIL 2017

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exceeded RO 2.7 billion, brining an investment of nearly RO 400 million into local industries.

Investment in transmission and distribution networks increased to OR 3 billion since the formation of Nama Group. As a result of directing these investments to the right channels combined with good asset management, the Sultanate has an electricity transmission network with 99.9% reliability.

Nama Group seeks to utilize renewable energy as it seeks to implement the Government’s energy strategy aiming at producing 10% of electricity consumed in Oman from sustainable sources by 2025. Al-Wahaibi said that in order to contribute to achieving these strategic objectives, a plan was developed to build several wind and solar power stations in several governorates, which will produce a total of 2560 MW by 2024.

Since the restructuring in 2005, there has been a focus on directing investments to the right channels. Restructuring has created an integrated system and assigned companies specific roles so that they would focus on their respective fields to maintain quality service. Complementary activities were assigned to non-NG companies, such as contractors and suppliers, to take advantage of their expertise and create a real integrated economy with the private sector.

The main objective of the electricity sector is to support Oman’s economy and the well-being of Omani citizens, and electricity is a key factor in all activities, whether in factories, offices or homes. Therefore, electricity services underwent major expansion to cover every corner of Oman, where even the smallest village is now connected to the grid.

These achievements required sizeable investments in electricity generation, transmission and distribution. Many power stations and transmission and distribution networks were built in various regions of the Sultanate, such as Northern and Southern Oman networks and Tanweer network in Al Wusta, Musandam and rural areas.

Oman Power and Water Procurement Company (OPWP), a member of Nama Group, focuses on the procurement of energy at the lowest possible cost. OPWP uses a competitive program that allows all international companies to provide their prices according to the required capacity.This is based on a 7-year plan devised by the company to determine electricity supply and

demand and how to manage them throughout the year and at peak times. Oman Electricity Transmission Company (OETC) is annually updating this plan to reflect the economic policy as well as population, commercial and agricultural growth in Oman. As a result, we are purchasing electricity from the private sector through a competitive investment process, without having to seek loans or government funding. OETC is also working on developing frameworks and practices to increase gas-consumption efficiency that reduces the overall cost of electricity. In gas consumption, we have already achieved savings as a result of efficient supply and demand management enabling us to have one of the best production costs in the GCC.

Looking closely at the changes of the electricity sector since the restructuring in 2005 until the end of 2017, we will find that the size of foreign investment in the electricity generation industry have grown to over OR 2.7 billion, i.e. more than 7 billion dollars. From this sector, RO 400 million have been invested into local industries through the company’s projects. Today, the market value of energy projects on MSM stands over RO 400 million. In addition, 1,000 jobs have been created in the sector. Installed capacity has nearly tripled from 2.9 GW to 8 GW, directly helping to avoid network interruptions in the summer before restructuring. Demand peak has almost tripled from 2.7 GW to 6.9 GW, and gas efficiency has reached 38% saving RO 139 million since 2005.

OETC handles the transmission of electricity to all parts of the Sultanate through high-voltage networks and plays a major role in the efficiency of the electrical system reducing the cost of

What are the most significant changes in the sector as a result of the restructuring?

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investments development in NG’s network.

Also our subsidiaries have received various international certificates in asset and HSE management. Combined with our close cooperation with Authority for Electricity Regulation (AER), these efforts drove electricity costs down from 38 baiza/KWh to 31 baiza/KWh, saving millions of Rials.

I would also like to commend the efforts of our staff to rid our costumers today from network interruptions that have become rare occasions compared to times before restructuring. At present, major electricity interruptions are

not due to network reliability, but rather often caused by severe weather conditions, such as wind and cyclone. For example, when Oman was hit by Mekunu cyclone, damages to roads and inaccessibility were the reasons that prevented faster restoration of electricity. If it was easier to enter to areas where electricity was cut off, we could have reconnected the network in record time because of the synergy and support shown by NG companies in such difficult times.

In every incident, we grow more conscious and develop our network, systems, action plans and the experience of our human resources in contingency management and response. For example, wooden utility poles were replaced with cement poles designed to withstand severe weather conditions.

electricity and increasing its reliability. It also manages and monitors load distribution using the latest technology and practices. As a result, the transmission network’s size increased from 2702 km in 2006 to 6682 km in 2017. In 2017, OTEC launched 400 kV high voltage lines and several investments were made to develop and expand the network. The reliability of the transmission network reached 99.9% limiting electricity interruptions. Investment in transmission networks is vital, and every new station should be connected to the network and its capacity transferred to load dispatch centers.

The number of load dispatch stations (in Muscat for example) have significantly increased to avoid past trends of using one station to cover large areas. After restructuring, electricity outside Muscat has become available in all governorates and cities of the Sultanate and OTEC is developing a 15-year plan to ensure on-demand transfer of electricity and network efficiency.

In distribution and supply, NG companies have won the challenge of rapid customer growth by nearly doubling its customer base and reaching approximately 1.2 million customers compared to roughly 0.5 million in 2006. RO 3 billion have been invested in the development of transmission and distribution networks from corporate profits and direct borrowing (Lamar Program by Nama Group) from international banks at competitive rates. This is a clear evidence of the confidence NG managed to build regionally and globally.

Investment increased eight times from RO 64 million to about RO 502 million between 2005 and 2017. NG assets stood at RO 4.2 billion by the end of 2017. These investments were directed to network development and expansion, as well as the development of several customer service programs.

The number of units sold increased by 29% since 2005, from 9517 MWh to 32349 MWh at an annual growth rate of 10%, alongside a 200% increase in electricity density for customers. Network loss fell from 24.6 % to 8.8 % saving approximately RO 200 million, due to administrative and operational efficiency and

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Since privatization is a major goal to be achieved in the electricity sector, what plans have you developed in this regard?

Privatization is one of the objectives of restructuring Oman’s electricity sector in order to enhance its role in national economy and benefit from international expertise to raise service efficiency. The electricity sector has gained a good reputation and become more attractive to investors, thanks to the transparent, clear and structured law. This led to a good response to every tender floated for the purchase of energy and water, enabling Oman to access the best prices and costs of electricity production. Today, the private sector is the investor and main operator of electricity generation.

Privatization in the electricity sector started two decades ago. In December 1999, the electricity and water sector restructuring initiatives were approved by the Council of Ministers. In August 2004, Royal Decree No.78 / 2004 promulgating the Law for the Regulation and Privatization of Electricity was issued. In May 2005, 9 companies were established under the umbrella of the Electricity Holding Company (today Nama Holding). The companies were formed based on their respective specialization in electricity generation, transmission, distribution, supply

and energy procurement.

In addition, the sector included the former Public Authority for Electricity and Water, whose mandate to develop public policy was transferred to the Ministry of Oil and Gas. Another player in this sector is AER that regulates the sector. Since 2005, electricity generation companies have been privatized through the sale of government-owned companies. In the new contracts for private generation companies, Al Rusail Power Plant was fully privatized in 2007, and Dhofar network was restructured in 2013. In 2014, Dhofar Generating Company was privatized. Later in 2017, NG launched the privatization program of transmission and distribution companies.

NG companies’ structure has shown resilience and efficiency to serve customers. It allowed each company to focus on dealing with its customers by its operational geographic area and social and economic diversity. This directly contributed to improving our services, accessing all regions and creating an efficient application process for electricity services.

Eng. Omar, you have talked about the privatization of generation, what about the privatization of transmission and distribution companies?

Previously, our goal was to improve the performance of companies in customer service, asset management, health and safety. By instilling these concepts in NG companies, we shifted our focus to privatization under the guidance of the Government, which is the main purpose of restructuring by engaging the private sector. After this involvement, it is time to get it engaged in transmission and distribution as Nama Holding has been mandated by the Government.

We began by hiring a global consultant, and invited international companies interested in investing in the electricity sector to make their initial offers as the first step in the Privatization process. We now have a list of 5 electricity

distribution and transmission companies that will be privatized:

1. Muscat Electricity Distribution Company2. Mazoon Electricity Company3. Majan Electricity Company4. Dhofar Power Company5. Oman Electricity Transmission Company.

This year, we are expecting Muscat Electricity Distribution Company and Oman Electricity Transmission Company to be privatized. We have received applications from more than 16 international companies to participate in the privatization. This demand confirms the high credibility of Oman’s electricity sector and the confidence of the investors.

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When do you expect the IPO for a share of the capital in order to complete the privatization process as stipulated by law?

The IPO will come a later stage. Privatization usually takes place with the participation of two parties; the strategic partner who has accumulated experience in this field and makes it available to individuals by offering it in the stock market.

Nama Group launched a program to finance its projects and you have started preparing for the second phase. Can you tell us about the latest developments and the interested financing companies?

Nama Group has become self-dependent in financing its expansion needs for its networks and various activities. To that end, Lamar program was launched to raise long-term financing and successfully raised large amounts during the first two phases. Demand exceeded expectations as companies and financial institutions inside and outside Oman offered more than the targeted amounts. We were able in the previous two phases to borrow RO 1.6 billion. In the third phase, we aim to raise OR 453 million to expand the transmission and distribution network. In

preparation for this financing, we have floated a tender within the capital investment program of a number of transmission and distribution companies.

Oman Electricity Transmission Company, Mazoon Electricity Company, Muscat Electricity Distribution Company, Majan Electricity Company and Dhofar Power Company will benefit from this financing. As a second step, the placement agent tender will be launched to prepare the financing process soon.

After restructuring the electricity sector and building an integrated infrastructure, what revenues is the sector achieving?

The electricity sector is making profits. Over the past years, most of these profits were directed to investment in expanding the network and increasing reliability. In the past two years, we began to pay modest sums to the Government. As for the profits of the transmission and distribution companies, they are determined by AER every 4 years. AER also reviews and approves the costs and investments to be made by the companies to raise efficiency and consider the cost of electricity in the interest of customers and the Government so that the profit does not

exceed a certain threshold. Should the threshold be exceeded for some reason, AER reduces the profit. It also organizes the sector and monitors the progress of companies, number of employees, investments, operating cost and other factors. The review takes a year to ensure that the cost of each company is realistic without exaggeration and the cost of financing and margin of profitability remain within limits.

Distribution companies are also subject to review and audit by AER.

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Human resources are an essential part of any development process. The electricity sector is one of the sectors that achieved high rates of Omanization. What measures is Nama Group taking to make the sector attractive and provide suitable job opportunities?

In Nama Group, we believe that human resources are the main driver for achieving our vision. All the success that has been made was mainly achieved by Omanis who represent 92% of our workforce. In some NG subsidiaries (such as Mazoon), Omanization rates are 98% and even 100% in the senior management. Therefore, we have directed a great deal of investments to develop the technical and administrative teams and improve our employees’ skills and abilities to enable them to tackle all challenges they face. We have come a long way in this field as we continue to improve and provide the staff with all necessary present and future skills. NG has identified 18 areas to develop skills within a clear framework. Since 2015, 1910 employees have been evaluated for skill development. “Ruwad “is one of the development programs being implemented across NG companies and aims to

develop staff skills and enable them to become future leaders.

Nama Group has also implemented an ambitious plan to consolidate shared services between NG companies. Nama Institute for Competency Development (NICD) was established in 2014 (currently known as Numo Institute for Competency Development) to develop human resources’ competencies in the sector. NG currently employs around 2,750 employees. In line with the Omanization policy and developing national competencies in the electricity sector, we launched a project to help job seekers by offering training opportunities and providing them with licenses to work in the sector in order to facilitate their employment with sector contractors or enable them to build their own businesses.

Technological development is endless and facilitates service provision. Are Nama Group’s services keeping pace with this development?

In the last few years, we have focused on improving customer service. We always seek accurate meter readings to be reflected in customer invoices. We also quarterly measure customer satisfaction to understand customers’ expectations. These surveys show 75% of customer satisfaction and the results truly help us identify areas of improvement.Complaints we receive are less than 0.5%, and 97.5% of complaints are timely resolved. Currently, e-billing distribution is at 13.4% and customers using e-channels increased from 7% in 2016 to 23% in 2017 and continue to increase. Initially, billing was undertaken by non-NG private companies. Later, NG took over this responsibility. We coordinated with some companies, banks and other stakeholders to enable anyone to electronically pay water and electricity bills in a few minutes using mobile phones and other platforms, applications and outlets without going to the office, thanks to the technological advances. The process has become

easy for those who wish to use this service. Nevertheless, offices are still open throughout the Sultanate. Among other technologies, we offer prepaid meters so customers can pay their bill in advance and manage their electricity consumption. We have also introduced remotely-read meters (AMR Technology) without sending employees to read meters. Also, remotely-read meters were used for high consumers to whom the Government has applied cost reflective tariff and will expand in the future. However, we should balance between the provision of this service and the jobs of current meter readers.

In addition, applications can be submitted, and procedures can be completed on company websites. However, the delay in responding to applications is due to lack of available land to build plants, but the process of submitting applications is easy.

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In recent years, we’ve seen a drive to utilize renewable energy in Oman. How far can you rely on this energy to produce electricity?

Naturally, Nama Group seeks to utilize renewable energy in line with the Government’s strategy.

This strategy aims to produce at least 10% of the electricity consumed in Oman from sustainable sources by 2025. To achieve these goals, the plan consists of several projects including two wind power stations in Dhofar. The first station is under construction and will provide nearly 50 MW upon completion in 2020. The second station will provide 150 MW and will be ready in 2023. Designed to produce 500 MW, the tender of Independent Power Project at Ibri solar power

station has been floated and will be awarded in the current quarter. The plant is expected to be ready in 2021. The plan also includes three more plants on the main network, each will produce 500 MW. Further, the plan includes building two 200 MW wind power plants in Duqm, in addition to a 50 MW waste recycling plant. The total renewable energy production until 2024 will be about 2560 MW.

Moreover, Nama Group is keen on using clean energy and has been able to switch all plants to operate on gas.

What are the most significant challenges facing the electricity sector? How do you overcome them?

The sector has the potential and tools to deal with all challenges and overcome difficulties through cooperation with government agencies and private entities.

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Sustainability

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Under the In-Country Value (ICV) Program, the Electrician Training Project develops the capacities and skills of Omani professionals and enables them to take over electrical jobs in the labor market. The program is expected to raise the percentage of Omanis applying for electric licenses to over 80% of total program participants.

Nama Ambassadors trains more than 2,000 students in 12,000 training hours to promote a culture of sustainable environmental development and introduce trainees to renewable energy resources, modern technologies and carbon emission reduction.

Wiyakum trains more than 1,100 participants on volunteer management during crises and severe weather conditions.

Baiti Amen trains more than 1,000 participants, including housewives, youth and students, introducing them to household and electrical safety and providing training on first aid.

The National Electricity Conservation Campaign (#Tadoom) targets 338 engineering students and architects working at consulting companies in the Sultanate, and trains them to design and build energy-efficient sustainable houses.

NAMA GROUP BROADENS ITS SUSTAINABILITY POLICY AND SUPPORTS OMANI YOUTH

Muscat - Khalid OrabiNama Group (NG) made significant progress in its sustainability policy and is committed to making positive contributions in social, economic and environmental activities in the Sultanate. In line with this commitment, NG plays a leading role in creating a positive impact in the communities it serves. Al Shabiba highlighted this aspect and met with representatives of SMEs supported by Nama Group to implement their sustainable projects.

Nama’s sustainability policy is based on three main pillars: social, economic and environmental. The social pillar aims to increase awareness of the importance of volunteering, community engagement and health and safety for employees and contractors. Meanwhile, the economic pillar aims to enable ICV by supporting SMEs, promoting local products and boosting Omanization. The environmental pillar promotes initiatives that aim at developing clean energy resources and reducing carbon emissions.

Since the official launch of NG’s Sustainability Policy on September 10, 2014, NG has undertaken several projects across Oman building on these 3 pillars and cooperating with different stakeholders. It also supported a group of SMEs formed by college and university graduates in Oman, training them on project management and implementation with the help of NG employees promoting voluntary work within NG.

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Environmental PillarThe Environment Pillar aims to reduce carbon emissions. The Group has undertaken a number of initiatives, including:

• The National Electricity Conservation Campaign: Nama Group launched a national campaign to rationalize the consumption of electricity for the fourth consecutive year, entitled “Tadoom”. Nama aims at highlighting the importance of rationalizing energy consumption and educating participants in campaigns about the best means of saving electricity as well as their role in conserving resources. The project targeted architecture engineering students and engineering consultancy offices to promote knowledge and culture about the construction and design of environment-friendly houses. Nama Group has mandated the implementation of this project to an engineering company composed of architecture graduates from the Higher College of Technology.

Commenting on the success of this project, Hanan bint Mohammed Al Kasbiya, CEO of Dakka Engineering Services, the company in charge of implementing the campaign, said: “Nama Group has provided the support to Dakka company which started its activities in 2017. We had the opportunity to train students and architects in the design of green houses and highlighting the role played by such homes in saving power consumption. “Nama Group not only provided financial support, but rather provided training on the planning, implementation and follow-up of the work plan from the beginning to the end of the project. Nama Group has also provided the required guidance to ensure that the project

is on the right track. This contribution has been very crucial for Dekkha - a small and medium-sized company- because it helped our staff in acquiring new skills and capabilities”, she added.

“Nama Ambassadors Program”:Nama Group launched the third edition of Nama Ambassadors Program in collaboration with the Ministry of Education, the Ministry of Higher Education and the Ministry of Manpower. The program targeted a group of school, college, university and vocational college students from all over the Sultanate. The program aims at introducing students to the sustainable environmental development concepts, the importance of renewable energy resources, relevant modern technologies, and sustainability project planning and delivery, designed to build a strong future generation ready to contribute to Oman’s sustainability.Representing an NG-incubated company incorporated specially to implement this project Al Miqdad bin Rashid Al Namani, said “We had the honor of implementing Nama Ambassadors Program in its second and third editions. After our outstanding performance as students participating in the 2nd edition of the program, NG advised us to establish our own company after graduation and supported us in the implementation of the project as an independent business. This helped us a lot in understanding financial and administrative operation and planning with major corporations.”

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“Our performance improved on the third edition, as objectives were set before starting the program to reach the largest number of students from colleges, universities and schools from different governorates across the Sultanate. We determined the methods used and performance indicators that would enable us to achieve our desired impact. We would like to thank Nama Group for giving us this chance, as our company today has secured similar opportunities from government agencies and other major corporations in Oman and the Gulf. NG gave us confidence in this business environment”, Al Miqdad added.

The Social PillarThe Social Pillar aims to provide safe electricity through health and safety projects, as well as to support local institutions by spreading a culture of volunteering. The objectives of this pillar were embodied in several projects including:

Baiti Amen Program (My Home is Safe): Nama Group launched the third version of Baiti Amen with the aim of building a culture of health and safety and raising awareness on necessary skills to deal with safety emergencies and prevent potential accidents at home.

“We had the opportunity to work with Nama Group in planning the project.” said Amal bint Khamis Al Jashmi, from the implementing company of the program Ajyal Al Himma. “NG also expanded its support by creating business opportunities for small youth businesses through Ajyal Al Himma, including design, media, implementation and printing companies. Furthermore, NG helped us to collaborate with governmental bodies such as the Ministry of Education and the Public Authority for Civil Defence and Ambulance (PACDA). We thank and commend Nama for its support and integrated approach to sustainability projects.” During Al Shabiba’s meeting with Asef Volunteering Team, the organizers of first aid workshops designed as part of Baiti Amen, Saleh bin Mubarak Al Mutani said “Nama Group provided our team with all necessary support to promote a first aid culture using innovative and creative approaches. The team implemented the project in 140 days, with the help of NG HSE professionals and PACDA officers. This

contribution improved the program’s quality and widened its scope allowing it to deliver its message and training to over 2800 members of the community. We have been tasked with developing Baiti Amen’s curriculum, an educational guide on home safety and first aid in collaboration with other stakeholders and specialists. Available to all community members on NG’s website, this curriculum addresses electricity safety, techniques to put out a fire, first aid basics and is one of the most important outputs of the project. It has been designed with an educational approach tailored to the target audience and various age groups. NG initiatives and projects are known to complement its services and strengthen the bond citizens and the community share with NG and NG employees.”

Wiyakum Program: Three years ago, Nama adopted a volunteering approach in cooperation with the National Youth Commission and the Ministry of Social Development. This year, NG developed a program to train volunteer teams and volunteers in crisis management and joined the effort to develop a policy for the management of volunteer work in such cases.“This program was created based on the study on volunteer needs, especially as Oman is becoming more exposed to a number of adverse weather conditions”, said Abdullah bin Mohammed Al Amri, Social Development Program Specialist at Destination Sustainability. “Dealing with severe weather conditions requires advanced management skills and efficiency when coordinating with authorities, following instructions and managing volunteers. In this regard, NG aimed to support volunteer teams in developing their skills to coordinate with competent authorities.”

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Al Amri added: “Given our experience in sustainability, we were tasked with implementing the program in collaboration with National Youth Commission. We organized several awareness sessions that targeted civil society organizations, voluntary teams and individuals. What impressed me the most in NG’s programs, and this program in particular, was Nama’s focus on extending the program’s reach to all parts of Oman. This creates a comprehensive and standardized knowledge that helps implement and improve voluntary work and management. We wish to extend our gratitude and appreciation to NG and all NG personnel working in sustainability”.

Economic PillarThe Economic Pillar aims to support SMEs, boost ICV and promote local products and Omanization. The Electrician Training Project under the In-Country Value (ICV) Program: Nama Group, represented by Numo Institute for Competency Development (NICD), a member of Nama Group, organized a project to train electrical technicians as part of the ICV program and develop the skills and competencies of Omani human resources in the electricity sector. Through this initiative, Nama Group intends to increase the percentage of Omani technicians working in NG contractors to 20%.

Eng. Majid bin Salem Al Rahbi, Director of Electrical Programs and ICV at NICD, said “The program targeted 75 participants in 2018 meeting enrolment criteria. NICD organized intensive theoretical and practical courses delivered by qualified Omani trainers.” The project aims to empower the national workforce

in the electricity sector. NG Omanization rate reached 92% and in some NG companies exceeded 95%, while one of NG subsidiaries achieved a 98%. Nama Group seeks to further drive Omanization with both contractors and suppliers. For that end, it conducted a survey on the number of Omanis who applied for an electricity license in 2016 and 2017. Results showed that 200 Omani technicians applied for the required licenses to work in the sector, but only 5% managed to meet the licensing requirements. Accordingly, we have developed an integrated training program covering theory and practice, to provide trainees with the required skills and knowledge that help them meet the requirements set by applicable laws and regulations. Spanning over 6 months, the program was a success and more than 80% of trainees managed to successfully complete the requirements. 60 license holders were able to enter the job market, proving the success and efficiency of the project’s 1st edition.

Mr. Mohammed Nasser Al Rahbi, one of the trainees, shared his experience saying: “This training opportunity developed the electricity connection skills I need to enter the job market. The program helped me to get a job in a reputable electricity company. I look forward to starting my own company that will cover load distribution and connection and provide energy solutions.”

On the other hand, Nama Group sponsored many events and projects under the Economic Pillar, namely: sponsoring Oman Vision 2040, The Research Council’s Smart Cities and Al Sharika SME competition developed by Injaz Oman.

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Customer Service

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Ambitious plans to utilize electronic technologies... Prepaid meters are successful

Completing electronic link with the Government agencies

50% of electricity consumption in Oman read by smart meters, 18.4% represented e-bills delivery and 28.1% of invoices paid by electronic channels

Applying Lean program to review procedures, increase productivity and efficiency and develop meter reading, billing and collection

Bills modified upon complaints are less than 0.04% of 13,540,609 bills issued in 2018All estimated readings are automatically and retrospectively adjusted upon receipt of actual readings

The periodic customer satisfaction survey showed an increase to over 74% at Group level and an annual study is conducted to receive customer feedback on improving distribution and supply services.

Salem Al Kimyani:

New 24/7 customer service channels opened, and systems launched to help review readings

Maximize the use of available systems to ensure quality improvement... 50% of customers are expected to use electronic payment channels by 2020

Engaging key customers and sharing rationalization experiences increased energy efficiency

Customer Service Achievements of Nama Group in 2018

OR 1,123 billion Network Investment:

1,219,156 customersNumber of Customers:

9999

%50 of electricity consumption

Smart Meter Readings

73.99%21,24%3,12%0,87%0,75%

0,04%

Majan Electricity Company 19.62%

Muscat Electricity Distribution Company 31.7%

Mazoon Electricity Company 35.83%

Tanweer 3.26%

Dhofar Power Company 9.42%

Customers Distribution per Category

ResidentialCommercialGovernmentCost Reflective Tariff (CRT) AgricultureIndustrial

NAMA GROUP ACHIEVES REMARKABLE IMPROVEMENT IN CUSTOMER SERVICE

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Effective Customer Service StrategyIn response to the never-ending progress in customer service and the growing demand for electricity and related services, Nama Group (NG) developed a customer service improvement strategy in 2013 to improve service quality. To enhance customer satisfaction, service quality will be improved by restructuring operations, utilizing modern technology and developing our human resources. NG’s customer base passed the 1 million customer mark (1,219,156 million in 2018) including 73.99% in the residential category, 21.24% in the commercial category, 3.12% in the government category, 0.75% in the agricultural category, 0.04% in the industrial category and 0.87% subject to cost-reflective tariff (CRT).

In line with this strategy, Nama Group electricity distribution companies took a giant step to facilitate and improve the quality of services by enhancing operational efficiency, training human resources and utilizing modern technology. As part of NG’s continuous development efforts, an ambitious plan is being implemented to utilize various electronic technologies to develop and improve services offered to customers.

Mahmoud Jallad, Senior Manager Group Program Customer Service Improvement, highlighted the strategy’s remarkable success in development, technical transformation and introduction of new services. He explained that NG’s strategy includes standard programs for distribution companies to improve services provided to customers including meter reading, billing, collection and call centers. Furthermore, each company develops and implements its own development plans and necessary support is provided to companies in order to promote interaction channels with customers and improve their service offerings. These programs have actively contributed to improving the quality of services.

Utilizing TechnologySalem bin Said Al Kimyani, Head of Customer Service Development Team at Nama Group, said “NG seeks to increase the utilization of

electronic technologies in developing service quality and speed, while adopting necessary systems and training human resources to develop services and achieve objectives.”

Nama Group, represented by Muscat Electricity Distribution Company (MEDC), Mazoon Electricity Company (MZEC), Majan Electricity Company (MJEC), Dhofar Power Company (DPC) and Tanweer Company (previously known as Rural Areas Electricity Company), has developed a clear strategy and road map to improve the quality and speed of services offered to enhance operational efficiency and performance. This builds on NG’s positive achievements and complies with Royal directives on eGovernment by developing local systems and linking them with service providers to boost digitization and provide easy and quick service to customers.

Normal meter

Pre-paid meter

Smart meter

%1

%4.5

%94.5

0285

Types of Meters

Developing Billing SystemsDistribution companies are also keen to reach the highest rate of actual readings and so far, Nama Group has achieved 92.7% in 2018. In cases where distribution companies are unable to obtain actual readings, estimated readings are issued based on actual consumption values.

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If differences in estimated readings occur, they are directly adjusted in the following readings. Moreover, Nama Group has improved the electricity bill by adding consumption details and dates associated with the billing process for further transparency with costumers on their consumption values.

In addition, Nama Group has upgraded its manual meter-reading activities and processes and introduced systems that help validate readings taken directly from the meter with a manual reading device by taking a picture of the meter reading when new readings fail to match previous readings. This caused remarkable improvement in the quality of meter readings.

Some NG companies have contacted customers and provided them with their own meter reading channels (self-reading service) in case the reader was unable to take the actual reading for various reasons, such as having the meter inside the premises or the owner’s absence at the time of the reader’s visit. Nama Group is now making greater use of its existing systems to ensure better quality of meter reading. It has also taken additional measures to ensure that invoices are properly delivered to customers where the manual delivery system requires scanning the barcode printed on the invoice at the time of delivery to the customer to track the site coordinates.

Jallad added that customer bills delivery has also been developed. In the past, paper bills were distributed by hand only, and now customers can receive their bills via text messages, e-mails and electronic links ensuring safe, quick and secure bill delivery. Nama Group also offers a payment reminder service activated upon delay.

Electronic services have developed significantly, as electronic bills sent by SMS and e-mail in certain NG companies have risen 90%.

Developing services has led to an increase in e-payment and customer satisfaction and a decrease in invoice-distribution cost. The use of these technologies resulted in a sharp decline of billing queries in 2018 compared to 2017. At Group level, Bills distributed by email or mobile text messages increased to 18.4% in 2018 compared to 13.4% in 2017.

Paper Bills

SMS

E-Bills

Over 50% of Consumption in Oman Captured by Smart MetersAl Kimyani said that Nama Group launched the remote reading system (via the telecommunication network) to record readings for high-consumption customers, such as factories, major commercial companies and government institutions, including customers subject to CRT. This technology improved reading quality and tracking consumption per hour helping costumers understand their consumption patterns and adopt new ways to rationalize consumption. Data also shows significant improvement in customer service. In 2018, more than 50% of electricity consumption in the Sultanate was read using remote smart meters and more than 9,000 customers were subject to CRT.

In response to customers’ requests, Nama Group, represented by Muscat Electricity Distribution Company, began offering pre-paid meter service. Launched in 2014, this

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service allowed customers to top up the meter with a pre-paid balance. Following the success of this project and the increasing number of applications, Mazoon Electricity Company began offering this service, and the rest of NG companies will follow suit in the coming period.

So far, more than 50,000 pre-paid meters have been installed. Companies are encouraging customers to choose these meters for their accessibility and special features that help customer control and rationalize electricity consumption. Prepaid meters are also suitable for apartments, residential complexes, small enterprises, customers looking for temporary electricity subscription and tenants in buildings and shops. This ensures that when the tenant terminates the lease, no financial obligations are incurred by the building owner.

Expanding Payment ChannelsContinuing the efforts to improve services and move to electronic payment, Nama Group expanded payment channels by adding more collection centers and payment machines located in some institutions and banks, Al Kimyani said. It also developed mobile applications such as “Khedmah” and “SADAD”, as well as Nama E-portal. The number of payment transactions through electronic channels increased and the number of customers using these channels grew to more than 28% and is expected to exceed 50% in 2019-2020. NG companies are intensifying their awareness programs targeting customers to encourage them to use the easiest ways to pay bills monthly.

An Efficient Interruption Management SystemMEDC deployed a system to manage reports related to network interruptions. MEDC can locate the caller’s property via its GIS and send its location using the navigation system to the nearest emergency team. The program sends text messages to the applicant with the report status and expected time of service restoration.

It can also track the responding emergency team and determine their proximity to the property. Nama Group is expanding this service to cover all its companies. NG companies urge customers to update their data to assist us in offering better service.

Customer SatisfactionIn line with Nama Group’s efforts to monitor customer satisfaction, a quarterly customer satisfaction survey is conducted using the “Voice of the Customer”. Some NG companies captured a customer satisfaction rate of more than 90% (Majan Electricity Company). Nama also carries out an annual study to understand customer feedback on service reliability. The results of these surveys and studies are then used to improve services offered by distribution and supply companies. Continuing costumer engagement and increasing satisfaction, Nama Group made sure contact centers are available 24/7 at all electricity distribution companies to receive all inquiries, requests and complaints. Recent figures show that 96.5% of complaints were resolved in less than 6 days while billing complaints remain very low (1 out of 1,000 customers throughout the year). Most complaints were raised during summertime, when the electricity consumption is very high.

Commenting on the accuracy of electricity bills and customer satisfaction in general, Al Kimyani said that distribution companies measure customers satisfaction by a survey on service accessibility, obstacles and the way companies address them. Improvement in service offered is measured before and after introducing any the change. 2018 figures show customer satisfaction has exceeded 74%, at Group level, compared to 70% in 2017.

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NG companies also organize awareness campaigns to rationalize electricity consumption and ensure safe usage on social media platforms and audio and visual channels. Nama Group sought to improve the quality of communication with customers and met with its CRT customers to explain CRT and share experiences of some major customers in rationalizing electricity consumption that reduced their operational expenses. Further, Nama Group organizes awareness campaigns in schools and other community groups to increase student awareness of energy conservation and the safe use of electricity.

Continuous DevelopmentNama Group strongly believes in promoting a culture of continuous growth and learning to keep pace with global technology development. It began implementing the Lean Management project to review, improve and streamline all operational procedures. The project is expected to increase NG companies’ productivity and efficiency and help them offer customers high-quality services.

Call CentersOn the benefits of modern technology in customer service, Mr. Mahmoud Jallad said

that the impact of technical transformation has become visible in various operational areas, such as billing and services. Today, customers can contact NG call centers and raise their inquiries or can use many services electronically without having to physically visit the company.

Current call center services include managing interruption reports, answering billing inquiries, updating readings through self-reading services, addressing complaints and offering instalment plans for customers failing to pay their bills.

Nama Group has renovated its reception offices and the offices of contractors handling bill collection.

The Head of the Customer Service Development Team at Nama Group said that Mazoon Electricity Company introduced several new customer service channels including a new channel through Sanad Service Centers. In 2018, Sanad offices received more than 95% of applications for new connection, initial connections, tariff change and restoration of electricity for maintenance. Statistics indicate that more than 20% of customers applied after official working hours, which reflects the great flexibility in services now offered around the clock.

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Committed to Better ServiceNG companies are committed to provide quality services for safe and sustainable electricity by empowering our human resources, investing in modern technology and joining hands with other stakeholders to follow the policies of our wise government to ensure Oman’s welfare and prosperity.

ONEIC

Payment channels

Collection Agent Offices

Mobile Apps

Distribution Companies Websites

Banks Websites and Mobile Apps

Bill Payments Machines

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Financial & Operational

Performance

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Muscat, 20 May 2019: Nama Group conducted its Annual Press Conference 2019 at the headquarters of Oman Electricity Transmission Company (OETC), a member of Nama Group. The event was prsided over by Eng. Omar Al Wahaibi, CEO of Nama Group, and was attended by all the Subsidiaries’ CEOs and Executives Managers, in addition to media representatives. During the Conference, Nama Group renewed its commitment to enhancing performance as well as the essential assets of the electrical power industry and the associated sectors.

Nama is striving to attain these goals, in line with its vision to become a leading reference for utility service excellence in the region. Mr. Al Wahaibi presented the financial and operational

results of the Group in 2018 and highlighted the key achievements, projects along with the updates on privatizing its subsidiaries, water sector restructuring and the renewable energy projects. He also shed light on the results of the Group’s Financing Project “Lamar” as well as the customer service indicators. The event presented the outcomes in terms of human resources development and the achievements of sustainability programs and projects in 2018.

Nama is actively and effectively participating in and contributing to the national sustainable development through delivering safe and highly reliable electricity services, while keeping abreast of the technological development and following the industry best practices.

Number of customers increased by 6.25%, investment of RO 378m in network development to meet demand and upgrade customer service

Total operation revenue increased by 14.87% to RO 1.290 bn. Electricity units sold increased by 3.98% to 33,562 GW/h

Net profit after tax RO 71.363m with 97.3% increase

High Credit Rate. RO 1.75bn raised under ‘Lamar” project up to 2018

4.55% increase in gas consumption efficiency, representing 22.37m m³/day

Electricity Transmission Network Reliability 99.9987%

2,750 current employees with average efficiency score of 9.11%. Omanization stood at 94.4% by end of 2018

New technology used for the first time in Oman: Reading 50% of electricity consumption through Smart Meter Reading system. Rapid growth in pre-paid meters

Spending more than RO 480K in ICV and sustainability programs. Remarkable progress in 2018.

NAMA GROUP CONDUCTS ANNUAL PRESS CONFERENCE 2019: COMMITTED TO PROVIDING SAFE & SUSTAINABLE ELECTRICITY

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In this sense, the Group has developed an ambitious plan to raise efficiency in terms of customer service, upgrade electricity network and services among its subsidiaries, along with empowering and enhancing the efficiency of its human resources, which led to outstanding achievements by Nama at all levels.

Operation and Financial Results:Nama Group seeks to enhance its operational and financial performance in the areas of generation, transmission, distribution, supply and procurement of electricity as well as to devote its resources for the building of the national economy and the community development. Moreover, the Group constantly cooperates with all the related entities to achieve the joint objectives of the Oman’s sustainable development. The Conference also highlighted the operating and financial results, whereas the electric power industry has maintained its significant growth in 2018 through well designed and implemented plans to upgrade and enhance the power generation assets, the transmission and distribution networks as well as the customer service. The Group’s total assets increased by 5.3% to RO 4.44 billion in

2018, compared with RO 4.220 billion in 2017.

The number of customers grew by 6.25%, as the Group expanded its outreach to more customers and new geographical areas. The Groups’ customer base has increased from 1,147,401 customer in 2017 to 1,219,156 in 2018. The Group has also invested RO 378 million in the expansion of the transmission and distribution networks in 2018. The network expansion, along with the increase in the customer base and higher demand on electricity have resulted in higher operating revenues of the Group by 14.87% to reach RO 1,290 billion in 2018, as compared to RO 1,123 billion in 2017. In addition, Nama has also boosted its operation efficiency to meet the growing demand, increasing the total generation capacity by 5.74%, and along with the increase of peak demand by 0.85% in the Main Integrated System (MIS) in comparison with 2017. Similarly, the gas consumption efficiency grew by 4.55%, with remarkable network reliability of 99.9987% despite the expansion of the transmission network to 7,135 km, i.e. 6.78% increase in comparison with 2017. The Group’s units sold grew by 3.98% to 33,562 GW/h in 2018, compared to 32,277 GW/h in 2017, where the increase in electricity came from the MIS. Furthermore, staff efficiency increased also by 9.11%. The Group’s profit before tax

Gas consumption per M3 / MWh

2018 2017

242 231

Gas consumption per M3 / MWh

2018 2017

242 231

Gas consumption per M3 / MWh

2018 2017

242 231

Gas Consumption per M3 / MWh

Gas Consumption

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witnessed remarkable increase by 9.12%, while the net profit after tax increased by 97.3% to RO 71.363 million, in comparison to RO 36.176 million in 2017.

Human Resources Development: Human resources are the primary driving force to realize Nama Group’s vision and mission and our employees are the key to our success. We, therefore, endeavor to enable our staff by equipping them with the skills and capabilities necessary to perform their tasks efficiently, which is as a high priority for the Group. To that end, the Group has been developing the skills and capabilities for all positions in accordance with clear and specific frameworks, and since 2015, Nama has started analyzing the efficiency of each employee against the competencies and skills required for the job. As a result, more than 2,690 Omani employees has undergone competency assessment in order to develop the necessary training and development plants to improve their skills and performance. A total of RO 2.696 million was invested in 2018, an increase by 41.2% compared to RO 1.910 million in 2017.

20172018

406CUSTOMERSPER EMPLOYEE

443CUSTOMERSPER EMPLOYEE

%9.11 which means that each employee in the Group serves 443 customers in 2018

Staff Efficiency

As part of our planning to achieve Nama’s vision, “Ruwad” Programme has been rolled out across Nama Group companies. The key objective of Ruwad is to identify employees showing high performance and potential and groom them to become future leaders. The program was launched in 2014 by nominating 14 employees

for the first “Ruwad” batch. In 2017, the Group announced the second batch, including 34 of its employees to receive training at HEC Paris, one of the world’s leading providers of executive education, according to Financial Times. The program was designed according to Nama Group’s Leadership Competency Module, so as to include business planning, individual and group training. Batch 2 training was completed, and 33 participants graduated in 2018.

Keeping in line with its objectives, Numo Institute for Competency Development (NICD) has continued to deliver training programmes in 2018 with a view to enhancing the efficiency of Human Resources. 211 training programmes were delivered by NICD, an increase by 17.22%, wherein a total of 3,190 employees were trained, i.e. 42.16% higher than 2017. Similarly, the number of training hours increased by 37.37% to 59,696 in 2018, in comparison to 2017. As part of the Group’s growth strategy, the staff efficiency grew by 9.11%, compared to 2017, which means that each employee in Nama serves 433 customers on average. Although the total number of employees decreased by 2.59% to 2,750, nevertheless, the Omanization rate reached 94.4% by the end of 2018.

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Utilizing Technology to Enhance Customer Service & Satisfaction In line with the steady progress made in customer service as well as the growing demand for electricity and associated services, Nama Group has developed a customer service improvement strategy in 2013, aimed at improving the quality of services provided and, consequently, enhancing customer satisfaction.

Under this strategy, Nama Group’s electricity distribution companies have achieved a remarkable progress in terms of streamlining and upgrading the quality of customer service. This has been achieved through enhancing the operational efficiency, training and qualifying human resources and using modern technology in the business model, starting from billing to the call centers. As part of our ongoing progress, an ambitious plan is being implemented to utilize the latest technologies to develop and improve the services rendered to our customers. The number of Nama Group’s customers exceeded the 1 million mark (1,219,156 million in 2018), of which 73.99% were in the residential category, 21.24% in the commercial category, 3.12% in the government category, 0.87% 0.75% in the agricultural category and 0.04% in the industrial category. In 2018, the distribution

companies made huge improvements to the processes of meter reading, online payment, and bill distribution. These services have actively contributed to the increase in customer satisfaction as well as in decreasing costs of meter readings and bill distribution. Customer satisfaction ratio reached 74%, a rise of 4% compared with 2017. This has also led to a significant drop in the number of bill inquiries in 2018 as compared to 2017, with 96.5% of the complaints resolved in less than six days.

There are three types of meters: the normal meter which is used by 94.5% of customers, the pre-paid meter (4.5%), and smart meter (1%). Nama Group has launched the Automatic Meter Reading (through telecommunications) to take readings of high-value customers, such as factories, commercial centers and government institutions, including customers to whom the Cost-Reflective Tariff (CRT) applies. The application of this technology has improved the quality of meter reading along with hourly recording of consumption, thus enabling the customers to view the details of their electricity consumption pattern and find better ways to rationalize consumption. The figures show a significant improvement in customer service. For instance, in 2018 more than 50% of electricity consumption in Oman was read using smart metering, with more than 9,000 CRT customers in 2018.

Meter Reading 92.7%

E-bills delivered 18.4%

E-payments made 28.4%

96.5% of inquiries resolvedin less than 6 days

Voice of Customer

Distribution Companies have dramatically enhanced their meter reading efficiency reaching 92.7% as a yearly average in 2018, compared to 88.6% in 2017

Distribution Companies expanded e-channel coverage for bill delivery. In 2018, 18.4% of bills were sent to customers by email and SMS, compared to 13.4% in 2017. In some DistributionCompanies, e-bills stood at more than 40%.

E-payment channels made significant growth in 2018. The average percentage of invoices paid via e-channels increased to 28.4% in 2018, compared to 17% in 2017.

Distribution companies maintained an excellent record of complaint and inquiry resolution across the years. The average closure percentage of complaints and inquiries was 96.5% in 6 working days.

Distribution companies perform quarterly Voice-of-Customer Surveys to understand customer feedback on services. Moreover, distribution companies conduct an annual survey to under-stand customer percep-tions relating to service reliability. The findings of these surveys are used as input to improve the services of Distribution & Supply Companies. Customer satisfaction on services increased by 4%,

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In response to customers’ requests, the Group, represented by Muscat Electricity Distribution Company (MEDC), started in 2014 to provide pre-paid meter service, which would enable the customers to top up the meter in advance. Following the success of this project and the increasing requests to avail this service, Mazoon Electricity Company began also to provide this service, and the rest of the Group companies will follow soon. To date, more than 50,000 pre-paid meters have been installed, as they are recommended for their user-friendly and other features that help the customers control and rationalize their electricity consumption. Prepaid meters are also suitable for use in apartments, residential complexes, small enterprises and temporary customers, in addition to tenants of buildings and shops, who will not incur any financial obligations to the landlord upon lease termination. The distribution companies endeavor to make actual readings, which reached 92.7% at the Group level in 2018. When actual readings can’t be obtained, estimated readings are made by using the real consumption values, and in case of any discrepancies, the estimations are adjusted in the next readings. The Group has also made improvements to the electricity bill, adding detailed information about the customer’s consumption and billing dates in order to provide the customers with transparent information about their consumption values.

Additionally, the Group has also improved the manual meter reading activities and operations by introducing systems that can help check the readings taken directly from the meter by using manual reading devices to take picture of the meter reading when the recorded reading is not compatible with the previous readings. This has led to a remarkable improvement in the quality of meter reading. Some of the Group companies have also provided customers with the option to send the reading themselves (Self Meter Reading Service) in case the meter reader was not able to register the actual reading for any reason (e.g. the meter is inside the property or the absence of the owner during the reading visit). The Group pursue currently to make greater use of its existing systems so as to upgrade the quality of meter reading. Further measures were also taken to ensure bill delivery to customers, as the manual delivery system requires scanning the bill barcode at the time of delivery to customer to monitor the site coordinates.

Moreover, bills delivery process has also witnessed a remarkable improvement. Previously, paper bills were distributed by hand only. Now, however, the bills are sent to customer via SMS, e-mail and electronic links, in order to ensure a safe, fast and secure bill delivery. The Group also provides late monthly payment reminder service. In continuation of the efforts made to improve services and shift towards e-payment, Nama Group has expanded the payment channels by adding more collection centers and payment machines located at some institutions and banks, as well as mobile applications, such as the “Khedmah” and “SADAD” apps along with Nama E-portal. The number of payment transactions through e-payment channels has seen a remarkable increase and the number of customers availing such channels has increased also to more than 28%, and is expected to exceed 50% by 2019-2020. The Group companies are intensifying their awareness programs for customers about the easiest ways to pay bills on monthly basis.

RO 1.75 bn raised via Lamar Financing Project - 2018Nama Group always pursue to develop its investments, projects and services as the group plays a major role in the national economy. It has invested in capital assets in order to expand and develop its networks and systems to meet market needs and requirements. The availability of capital financing sources is, undoubtedly, critical to enable us to achieve our vision and mission. It is worth noting that Nama has made significant progress in Lamar Project since inception in 2014, as Nama Group, under Nama Holding, has succeeded in raising RO 1.75 billion from various funding sources with different maturities. The Group has managed, through sources diversification, effective promotion and marketing policy and stabilization of interest rates to successfully achieve its financial cost targets, in accordance with the applicable standards, despite the price controls. The fundraising programme will further support the Group’s capital expenditure to support its distribution and transmission network, as well as to provide sufficient collateral for the existing short-term borrowings.

In 2018, NG launched Tranche III of Lamar

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Project for the period of 2019 - 2021, estimated at about USD 1.5 billion (RO 580 mn). The scope of work for the winning consortium of banks include providing the advisory report, along with preparation and execution of transactions, and provide consultancy over hedging, facilitating process of accessing funds till financial closure.

Total Funds raised: RO 1.75 Billion

RO1.75

Billion

Privatization Program In line with the Omani government mandate, Nama Holding has launched a partial privatization programme for Nama Group’s electricity transmission, distribution, and supply companies through international strategic partners. Nama Holding announced the sale of up to 49% of its shares in Oman Electricity Transmission Company (OETC), and the sale of up to 70% of its shares in its distribution and supply companies respectively: Muscat Electricity Distribution Company (MEDC), Majan Electricity Company (MJEC), Mazoon Electricity Company (MZEC), and Dhofar Power Company (DPC). The process for OETC and MEDC privatization was initiated in October 2018, and 25 entities have recently expressed their interest in participating in the privatization process of these two companies, either individually or in consortium.

Water Sector RestructuringNama Holding continues to work closely with the Public Authority for Water (DIAM) to implement

the Government’s initiative for restructuring the country’s water sector. Nama Holding is spearheading the execution of the 20-month long detailed design and implementation phase, which was initiated in April 2018 and moving forward as planned. It is expected to be completed in December 2019.

Renewable Energy Projects With a view to exploiting the vast solar energy potential in Oman and meeting the country’s renewable energy targets, Nama Group, represented by OPWP, has conducted a competitive procurement process of a 500 MW Solar Independent Power Project (IPP) at Ibri, under Oman’s well-established I(W)PP programme. The request for proposal was released to pre-qualified bidders in June 2018, and bid proposals were received in November of the same year. The commercial operation is envisaged to commence in June 2021. This project will be the first of a series of Solar IPPs expected to be initiated by OPWP in the next few years, which bear witness to the Group’s commitment to the diversification and enhancement of the overall efficiency in power generation process.

Furthermore, Nama Group, represented by OPWP, has also conducted, in 2018, a techno-economic feasibility study to explore the possibility of developing a waste-to-energy (WTE) project in Oman. The study has proved the feasibility of such project.

Accordingly, OPWP has initiated the project development process that will be followed by similar projects under the I(W)PP programme. The project COD is anticipated in Q2 2023.

In addition, Dhofar Wind Project is another major renewable energy project, jointly developed by the Rural Areas Electricity Company S.A.O.C (Tanweer) and UAE-based MASDAR along with OPWP as offtaker of the power generated. The development of this project depends on the long-term Power Purchase Agreement between OPWP and Tanweer. The Wind Farm will comprise 13 wind turbines with a production capacity of 50MW. The project’s scheduled commercial operation date is in Q3 2019.

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Nama Group: Sustainability Policy and Omani Youth SupportNama Group always endeavors to align its business with the sustainability policies adopted in Oman, which are consistent with international trends in this regard. We have developed a triple bottom line approach focusing on the economic, social and environmental impacts of our activities. Accordingly, the Sustainability Policy, officially launched on 10 September 2014, focuses on developing and sponsoring the projects that can directly and indirectly impact the priority areas. The Sustainability Policy complements all the other strategic initiatives and adheres to our Group’s values of integrity, respect and professionalism. Our mission as regards sustainability is to support Oman’s development by leading and enabling Nama Group to deliver safe, reliable and efficient electricity and water services. We have allocated the following resources to NG’s sustainability effort:

1. A budget of 0.5% of the Group Net Profit; up to RO 500,000 (Whichever is less).

2. Allocating one working day of each staff member per year, for volunteering activitiesGiven its nature, our business faces many challenges and opportunities due to its direct impact on our stakeholders. Therefore, priority is assigned to the following issues: health and safety, increasing demand for electricity, limited energy resources and our young society. Nama Group, therefore, is committed to promoting stakeholders’ engagement for better understanding of and response to their expectations and main concerns. Stakeholder Mapping and Assessment is carried out as part of sustainability documentation mechanism.

Since launching this policy, Nama Group has made outstanding progress in terms of sustainability projects in 2018 and it maintaines its commitment to create positive impact across the country. We strongly believe in leaving a positive legacy for the communities where our services are offered.

In 2018, the Group has achieved significant

improvement in the projects under the Sustainability Policy. Nama Group’s Sustainability Policy is based on the economic, social and environmental pillars.

Economic Pillar:Believing in their role in the economic development of Oman, Nama Group accords special attention to the small and medium enterprises (SMEs), in line with its activities and business aimed at maintaining profitability and achieving the target rates of return. Accordingly, the training and developing of young talents is one of the main objectives of our sustainability policy, whereby we seek to help them run successful small businesses and enterprises.

Nama Group constantly plans to adopt, implement and offer sustainable programmes and sponsorships to support SMEs and develop the skills and capabilities of the Omani youth to enable them to actively participate in the social and economic development. In 2018, we have spent 29.1% of our sustainability budget on economic projects that align with our policy objectives. In addition, we have incubated four SMEs to implement our main projects based on the scope of their business, along with subcontracting certain services to other SMEs.

Economic Projects: • The Electrician Training Project under the In- Country Value (ICV) Programme

Economic Sponsorships:• Oman Vision 2040• Injaz Oman: Al Sharika SME Programme• Smart City Platform in Oman (The Research Council) • Future Mobility: E- vehicles in Oman • Global Shapers Community event

Social Pillar: A great attention is given to the social aspect, as part of business expanding activities to positively impact the lives of our customers by providing

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access to safe and reliable electricity throughout the country. Moreover, the safety of our staff and contractors is a high priority for us, by setting relevant corporate objectives and KPIs.

In 2018, we have invested 29% of our budget in doing and sponsoring social projects. Playing our part in developing the society, Nama Group has launched several safety and volunteering programmes. Furthermore, we have made numerous contributions to the causes of non-profit organizations in Oman that share our vision on sustainability. In addition, we encourage our staff to spend at least one workday per year on volunteering activities.

Social Projects: • HSE Campaign • “My House is Safe” Program (Baiti Amen) • “Wiyakum” Volunteer Program

Social Sponsorships: • Performance Enrichment Conference• Al Roya’s Newspaper CSR Forum • Oman Sustainability and Governance Centre• Nizwa General Majlis • Sponsorship of the Legal Group at SQU

Environmental Pillar:The environmental aspect is of paramount importance for Nama Group. We have designed projects in such a way as to achieve the goals of the sustainability policy. In particular, we have determined two long-term objectives under out Sustainability Policy:

• Understand and decrease carbon intensity per MW of electricity and water produced according to the relevant international standards; and• Develop and implement annual campaigns to encourage customers to reduce their electricity consumption.

Nama Group plans to follow the international trends to reduce carbon emission, which is one of the main causes of global warming. We look forward to continuing this undertaking by developing key projects relating to the

environmental issues and supporting other institutions through well-planned sponsorship activities.

Environmental Projects:• Nama Ambassadors Program • The National Electricity Conservation Campaign

Environmental Sponsorships:• Building Renewable Energy Lab for Ministry of Education - Dhofar • Oman Water Society Seminar • Environment Society of Oman

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Environmental Pillar:

Economic Pillar:

• Number of trainees 1,350

• Number of workshops 8

• Number of training hours 6,750

• Number of trainees 305

• Number of workshops 9

• Number of training hours 2,365

• Number of trainees 1,140

• Number of workshops 12

• Number of training hours 6,840

• Number of trainees 2,021

• Number of training hours 12,126

• Number of presented projects 423

• Number of executed and evaluated projects 29

• Number of trainees 75

• Number of workshops 12

• Number of training hours 18,000

TheNational

Electricity Conservation

Campaign

Nama Ambassadors Programme

My Houseis safe

(Baiti Amen)

Wiyakum Programme

TheElectrician

Training Project of the ICV

programme

Social Pillar:

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Renewable Energy

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NAMA GROUP ATTRACTS INVESTMENTS TO UTILIZE OMAN’S NATURAL RESOURCES IN RENEWABLE ENERGY AND MAKESTHE SULTANATE A KEY DESTINATION

Nama Group, represented by Oman Power and Water Procurement Company (OPWP), has developed an ambitious plan to utilize renewable energy in power generation. The findings of many studies conducted by the Company have pointed out that the level of solar and wind power density in Oman is considered among the highest in the world, and can potentially meet the ever-growing demand for electricity in the country.

In line with this shift towards renewable and clean energy, Nama Group, and its subsidiaries, have launched several solar and wind power generation projects, with the aim of increasing

the overall contribution of renewable energy projects to 25% - 30% of the total power generation capacity in Oman by 2030. Total renewable energy production is expected to reach about 2,560 MW by 2025.

The first renewable energy project was set up at Al Mazyouna, where a pilot solar power plant, featuring 1,617 solar panels, was built by Tanweer. The good outcomes of this project have opened the door for more investments in similar great projects. Dhofar Wind Power Project, the first of its kind in the region, is envisaged to start its pilot operation phase in Q3 2019.

Nama Group seeks to leverage Oman’s natural resources for renewable energy in order to make Oman a leading destination for renewable energy investmentTurning to renewable energy can open new horizons for diversification of national economyNama: Renewable energy projects can support economic diversification, harnessing technology and job creation. Our target is to meet 30% of our energy demand from renewable resources by 2030Dhofar Wind Project, the first of its kind in the region, is set to start commercial operation by Q3 2019, with other projects underway500 MW Ibri Solar IPP is another successful project, with commercial operation expected by mid-2021Ibri IPP to reduce more than one million tons of CO2 emissions annually

Eng. Yaqoob Al Kiyumi, CEO of OPWP:Increasing private investment in renewable energy; new wind plants in the pipeline at Jalan Bani Bu Ali and DuqmManah IPP tender to be floated before the end of this year. Other power plants and recycling projects under preparation.

Eng. Saleh Al Rumhi, CEO of Tanweer:We keep abreast of the latest technology to cope up with the relevant strategic developments in Oman and worldwideWind energy is now a reality: 13 turbines already installed, grid integration underwayWe target to award “Solar-Diesel Hybrid Projects” tender by the end of year, so as to replace the conventional power plants in the future.

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Earlier this year, OPWP has announced the award of 500 MW Ibri Solar IPP project. The commercial operation is expected to commence by mid-2021.

More renewable energy projects will soon increase rapidly across the country, in accordance with the plan and timeframe set by Nama Group and its subsidiaries, with a view to contributing effectively to the economic diversification, creating more job opportunities and attracting new investments. Such projects will also help in transferring new technologies and offering great opportunities for knowledge and skills development.

Promising InvestmentsEng. Yaqoob bin Saif Al Kiyumi, CEO of OPWP, said “As a bountiful country full of natural resources, such as sun and wind, etc., Oman has the potential to become one of the major players in the field of renewable energy production.” He also pointed out that during the past few years OPWP, in collaboration with the Public Authority for Water (DIAM) and the Authority for Electricity Regulation (AER), has conducted numerous field studies of solar energy resources, and will soon be initiating similar studies of wind energy. These studies help the developers and the financing institutions build trust and confidence in the investment in such projects. Al Kiyumi affirmed that there’s a great deal of private sector appetite for renewable energy projects. In fact, some of the key projects are currently financed 100% by private investments, including Ibri IPP project. He pointed out that the Power sector has been the most attractive sector for the local and international private investments during the last two decades. This can be mainly attributable to the fair and transparent tender and awarding processes. We anticipate this sector to maintain its attractiveness among investors, under the government plans to maximize the private sector’s role in the economic development.

“When we talk about investment, we are not focusing solely on offering promising opportunities for private investors in renewable energy, as sustainability is also equally

important for energy diversification,” said Al Kiyumi. He further added that the easy and secure access to electricity is a very important concern for any entity intending to invest in Oman. In this respect, Nama Group plays a crucial role, as electricity supplier, in attracting new investments and ensuring sustainable overall economic prosperity.

4 Solar PV ProjectsCommenting on the main projects aimed at optimizing the use of renewable energy sources, especially solar energy, and utilizing the same in creating eco-friendly sustainable sources of energy, he added that the current plans envisage building four solar PV projects up to 2025, with a design capacity of 500 MW each, but the exact capacity will be determined after conducting the necessary technical analyses.

There is also another 600 MW solar project in the pipeline, along with a waste-to-energy plant project. Moreover, as part of its efforts to use clean energy, Nama Group is now relying more on natural gas in most of its power plants.

Manah Solar IPP TenderFurthermore, Eng. Yaqoob bin Saif Al Kiyumi, CEO of OPWP, revealed that the upcoming projects include Manah Solar IPP project, which will be given high priority in the implementation plan. The pre-qualification tender documents will be released soon and the final documents by the end of this year. The commercial operation of the project is expected by H2 2022.

As for the current projects, Ibri Solar IPP, the first of its kind in Oman, is one of the key projects being implemented currently, as being a successful model of clean and renewable energy sources projects. The project also aims at reducing more than one million tons of carbon dioxide (CO2) emissions annually. The RO 155 million worth

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project, totally financed by the private sector, has already been awarded, and the COD is scheduled in mid-2021, with a capacity of 500 MW. Oman Electricity Transmission Company (OETC), a member of Nama Group, will handle the transmission of the electricity generated from the plant via the MIS. This will ensure reliable electrical supply to a large proportion of households, along with significantly reducing CO2 emissions.

Commenting on the future expansion plans in terms of wind power generation projects, the CEO noted that in addition to Dhofar Wind Project developed by Tanweer, more upcoming projects are also planned in Jalan Bani Bu Ali and Duqm. “2023 Wind” project, Oman’s first utility scale wind power project, envisioning a world-scale capacity of 300 MW, will be built at an estimated cost of around USD 1 billion.

Wind Resource Assessment in Different LocationsIn addition to the planned solar projects, OPWP is in the process of assessing wind resource at several proposed sites for the project in order to select the ideal locations for wind power projects. Areas with relatively high wind speeds at Al Sharqiyah, Al Wusta and Dhofar will be explored in the assessment scheduled in Q3 of this year. The building process will start in Q3 2020 and the commercial operation in late 2023.

Proposed Waste-To-Energy Projects On the other hand, the waste-to-energy project is of great importance for the environment conservation and to convert waste into reusable energy. If this project proves successful, it will serve as a catalyst for more similar projects across the country. With target capacity of around 100-150 MW, the project is progressing quite well in cooperation with AER and Oman Environmental Services Holding Company (Be’ah). Be’ah will be supplying the project with up to 1.4 million tons of waste per year in order to generate around 110 to 150 MW of electricity. The development process of the project, which will be constructed at North Al Batinah Governorate, has already started. The pre-qualification tender will be launched in the Q2 this year, and the commercial operations in the 2nd half of 2023.

Resource Sustainability & Diversification Al Kiyumi further added that the renewable energy projects of OPWP are part of the ambitious vision of the Omani Government, which is aimed at integrating the requirements of the National Energy Strategy with the power demand forecasting, and the development of related projects to meet this demand. He affirmed that solar and wind power projects are among the main methods of achieving the shift towards sustainable and diversified energy resources and reducing the reliance on conventional non-renewable ones. In addition, renewable energy is an important component of any policies aimed at preserving the environment. Innovative modern technology also plays a very significant role in renewable energy projects and contributes to transferring modern technology to the country. To this end, we have already embarked upon negotiations with the key research bodies in this field, including The Research Council. Hopefully an agreement will be reached soon to launch the first such project.

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Youth Training and RehabilitationAs regards the training and development plans for the Omani youth, OPWP’s CEO said that Omanization and supporting the national cadres are among the top priorities for Nama Group and its subsidiaries. The remarkable development in electricity generation and water desalination projects are going in parallel with similar efforts to absorb the national cadres, who have already proved competent at all levels. This is being done through an organized manner through predetermined training and development programs, in coordination with the relevant authorities. A great deal of attention is also accorded to the concept of “In Country Value” (ICV), and OPWP has in place a specific system to achieve the same and provide good business opportunities for entrepreneurs. OPWP requires the investor to insert a certain level from the local content, which will contribute to the development of the relevant local competencies and industries. He also noted that there are multiple benefits of such projects for the population in general and for the electricity customers in particular due to the shift towards renewable energy.

Nama Group, in cooperation with all concerned parties, is committed to the development of the electricity generation and water desalination sectors, based on well-studied scientific plans to ensure delivering of the positive outcomes to the whole community, while maintaining world class HSE performance. That is to say, such type of projects of switching to renewable energy has wider-ranging benefits to the current and future generations.Some benefits can be direct, such as the highly positive environment impact as renewable energy plays an effective role in reducing the harmful emissions at tangible rates. While other results are related to the financial aspects, as large consumers who are subject to the Cost Reflective Tariff will not incur additional financial burdens over the medium term due to the introduction of this type of energy, or the cost may even decrease in the long term. More importantly, such projects can add immense value to the national economy

in terms of promoting economic growth and modern technology transfer.

Keeping up with theLatest TechIn our interview with Eng. Saleh bin Nasser Al Rumhi, CEO of Tanweer, he noted that the Company’s activities cover about 75% of the Sultanate’s geographical area, including Musandam, Al-Wusta, most parts of Dhofar, and some parts of Al Dhakhiliya, Al Dhahirah, South Al Sharqiyah, in addition to the Sultanate’s islands. It should be noted that connecting these remote areas to the main grid is a real challenge. Nevertheless, we managed to deliver electricity to the majority of these areas, covering more than 99% of the residential areas, along with providing electricity to some very important sites, such as the Special Economic Zone in Duqm (SEZD) and Al Mazyuna Free Zone. Mr. Al-Rumhi further pointed out that, since 2015, Tanweer has been exploring other renewable and eco-friendly resources of electricity, along with keeping up to date with the latest technologies in the field of alternative energy, which is a strategic trend in Oman and worldwide. “We have started at Al Mazyuna in 2015 with a pilot plant comprising 1,617 solar panels. Experiments were conducted on two new technologies for generating electric power by using solar cells. The findings proved its feasibility in terms of production, especially with solar PV panels, which exceeded our expectations, producing about 546 MW per year. Thus, Al Mazyouna solar plant has become Oman’s first commercial on-grid solar power project,” he added.

Saving Fossil Fuel for Other UsesTanweer’s CEO said that the Company has adopted a new operational vision since the beginning of 2019- To increase the contribution of renewable energy to its total electricity production capacity by approximately 20% by 2025. This is a plausible short-term vision that can be achieved by applying the latest

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technologies in this field. He further added that the fuel generally used for power production in the northern region of the Sultanate is diesel and gas, which is a non-renewable resource that have also harmful impacts on the environment, such as CO2 emissions, etc. Using renewable energy resources will, consequently, spare such hydrocarbons for other uses, mainly for industry. He also stressed that renewable energy initiatives can make effective contribution to boost the country’s GDP growth and create further other investment opportunities for the targeted industries in accordance with the proposed initiatives under “TANFEEDH”, the National Program for Enhancing Economic Diversification,

Dhofar Wind ProjectTesting PhaseCommenting on Tanweer projects, Eng. Al Rumhi said: “Some of the projects are private investments under our management and supervision. The ongoing Dhofar Wind Project includes 13 wind turbines that have been fully installed and are now in the final networking stages. The plant is still undergoing initial testing. The trial operations are expected to commence in Q3 this year. The first-of-its-kind project in the region, with a capacity of 50 MW, will be opened in November, to coincide with the National Day celebrations. Eng. Al Rumhi expounded that extensive feasibility studies, including monitoring wind speed in this region, were conducted in advance. The studies showed that the coastal areas along the Arabian Sea feature high wind speed and, thus, have high potentials for wind energy. The Sultanates’ northern areas, however, can depend on solar power. It is therefore anticipated that the majority of the investments in the southern part of the country will focus on wind energy, starting with this maiden project, while awaiting more similar projects in that region during 2021 and 2022.

11 Hybrid Power LocationsEng. Al Rumhi also pointed out that Tanweer is also working on “Solar-Diesel Hybrid Power

Project” spanning across 11 sites. The project is hybrid in that it uses solar energy along with fossil fuels, added to the existing sites, in the hope that it will ultimately replace the conventional plants in the future. The project will cover 5 sites in Dhofar region, two in each Al Wusta and South Al Sharqiyah, and one location in each Musandam and Al-Dhahirah governorates. The tender is planned to be floated by end of this year, and the implementation is scheduled to start early next year.

The CEO of Tanweer, Eng. Al Rumhi noted that the cost of the project will be determined after all the necessary procedures have been completed, as we are still in the pre-tendering stage, which will be carried out in two phases-first the technical evaluation and then comes the awarding phase. Tanweer has already made a preliminary invitation to bid to gauge the commercial interest in the project. Interestingly, more than 95 local as well as international companies expressed their interest in the project.

Opening New Horizons for KnowledgeEng. Al Rumhi highlighted that renewable energy projects play a vital role in creating job opportunities. He added that the involvement or utilization of renewable energy constitute a major shift in the business world, as the involvement of new technologies in this field can open new horizons in terms of knowledge and skill development. Such energies require different handling methods from the conventional energy sources at all the manufacturing, usage and maintenance levels

along with good knowledge and understanding of the associated technologies. He further clarified that renewable energy requires less maintenance as compared to diesel or gas power plant. Such different operational philosophy would contribute to creating new job opportunities in relation to the assembly

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and installation of such vast plants, as we need between 1 - 3 hectares to produce one megawatt of solar energy, depending on the terrain type. This would help create new business opportunities for SMEs and other interested parties.

Promising Entrepreneurial Opportunities The CEO of Tanweer also stated that water well pumping by using solar energy is one of the promising fields for entrepreneurs, and we have already received requests to connect remote off-grid water wells, which would entail high networking costs. Therefore, we decided to set up small solar-powered water pumping stations. We are now considering awarding such projects to the Omani SMEs in the Q3 this year. It is worth noting that the studies have already proved the feasibility of these pumps, as an alternative solution for the high networking costs.

Eng. Al Rumhi pointed out that the SMEs have shown great interest in these ventures. In the past, there were only 3 registered rooftop solar installation companies, but now the number has remarkably increased to 15 qualified companies whose main business activity is rooftop solar panels installation, as such investment is not so much capital-intensive. He noted that Tanweer uses solar panels at its Head Office in Muscat, saving about 7% - 10% on the electricity bill. The project is part of an initiative to install solar systems at all Tanweer office buildings.

Streamlining Procedures As regards the challenges faced by Oman in the field of renewable energy, Eng. Al Rumhi said that the availability of land plots is one of such challenges, since allocation of plots for constructing plants thereon is not an easy process. However, the process is easier now, thanks to the support provided by the Implementation Support and Follow-up Unit (ISFU). In addition, this domain is still new and the companies still need some time to acquire

the knowledge and experience required, not to mention that the national skills and competencies in this area are still limited, yet we have noticed a growing interest among students majoring in electricity, engineering and economy to venture into this new business field.

Commenting on the availability of academic disciplines for renewable energy, Eng. Al Rumhi said that it has been a challenge in the past because the field was still nascent, but after the adoption of the renewable energy policy in Oman, with the goal to achieve at least 10% of grid-interactive power generation capacity from renewable energy systems, huge academic efforts are being made to introduce new energy-related disciplines in Oman and worldwide. Universities are now offering disciplines under bachelor’s degree programs, that is to say, there is a strong drive within the academic institutions towards the economics of renewable energy industries.

He noted that one of the other challenges facing renewable energy projects is the rough terrain, hindering the installation of wind plants on mountain tops, as the plants must be constructed at certain levels. On the other hand, and despite the abundance of solar energy, yet its storage mechanism is still expensive. Nevertheless, if the prices of storage technology go down, as we began to notice recently, it will result in a radical shift in the overall power generation philosophy everywhere and will eliminate the need for the conventional power plants.

In conclusion, Eng. Al Rumhi also said that Tanweer is currently in the process of hiring a group of engineering graduates and provide them with internship at some of the Company’s projects, especially Dhofar Wind Project. Tanweer plans to enroll them in training courses with the parent companies in order to gain sufficient experience in the field of wind energy in addition to turbine operation and maintenance. Furthermore, Tanweer is planning to provide training for its employees with expertise in renewable energy for seamless shift from conventional to renewable energy.

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