Conserving Resources, Creating Value Sustainability Report 2015

KAHRAMAA Sustainability Report 2015

ABOUT THIS REPORT We presented our first report in 2013, and in 2014 we adopted the Global Reporting Initiative (GRI) G4 framework. This framework, along with the GRI Electric Utilities Sector Disclosures, has again guided the compilation of our report in 2015, including discussions with our stakeholders. We confirm that our 2015 Sustainability Report complies with all GRI G4 Guidelines, ‘in accordance’ option Core. The Qatar National Vision 2030, our Long-Term Corporate Strategy, and the requirements of our stakeholders drive KAHRAMAA’s direction for sustainability. Our first Sustainability Report in 2013 with the theme ‘Changing Mindsets, Inspiring the Future’ highlighted our core value of implementing a sustainable direction for the development of the water and electricity market in Qatar. Our 2014 Sustainability Report with the theme ‘Connecting’ aimed to reflect our strong commitment to working together with all our stakeholders toward responsible and transparent operations and Qatar’s enhanced socio-economic development. In 2015, low oil prices opened up new opportunities to focus on more efficient use of all our resources to create sustainable value for present and future generations. This year the theme of our report is ‘Conserving Resources, Creating Value’, which reflects KAHRAMAA’s commitment to achieve internal management of its resources in line with the rest of the industry, while being a catalyst for the conservation of natural resources in Qatar as a whole. By acting efficiently and responsibly, and leveraging the influence of our advocacy and policies, we are set to help our country sustain value creation.

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BOUNDARY, SCOPE AND REPORTING PERIOD This report covers the sustainability performance of KAHRAMAA during the calendar year 2015 (January– December). Where data permits, we have presented historic trends and conducted comparative analyses. The performance is related to company operations, including its headquarters’ operations, and activities involving the transmission and distribution of electricity and water in Qatar alone. The generation of electricity and water are not within the scope of our operations. SUSTAINABILITY ASSURANCE The information in this report has been internally reviewed to ensure its accuracy. As our sustainability practice matures further, we aim to seek external verification of our performance in the near future. WE VALUE YOUR FEEDBACK We are committed to improving our sustainability performance and hope this report will continue to enhance communication with all of our stakeholders. We welcome feedback on the content of this report, and encourage contributions as well as suggestions from all our stakeholders for the coming years’ reports. Suggestions and feedback can be sent to: Dalia Abdelhalim Al-Toukhy, Advisor - Conservation & Energy Efficiency Department at [email protected].

OR THROUGH THE FOLLOWING CHANNELS

WWW.KM.COM.QA

 HTTPS://WWW.TWITTER.COM/KAHRAMAA  HTTPS://WWW.FACEBOOK.COM/KAHRAMAA  HTTPS://WWW.INSTAGRAM.COM/KAHRAMAA

GRI G4-17 | GRI G4-18

KAHRAMAA Sustainability Report 2015

CONTENTS 4 6 7 8 17 28 36 47 54 59 65

2015 HIGHLIGHTS AND ACHIEVEMENTS INTRODUCTION FROM H.E. MINISTER OF ENERGY AND INDUSTRYT INTRODUCTION FROM H.E. KAHRAMAA PRESIDENT ABOUT KAHRAMAA KAHRAMAA’S APPROACH TO SUSTAINABILITY CREATING VALUE FOR OUR CUSTOMERS CONSERVING OUR NATURAL RESOURCES PROTECTING AND DEVELOPING OUR PEOPLE DELIVERING ECONOMIC VALUE SHAPING OUR SOCIETY GRI G4 CONTENT INDEX

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KAHRAMAA Sustainability Report 2015

2015 ACHIEVEMENTS

KAHRAMAA RECEIVED CRYSTAL AWARD FOR QATARIZATION PROGRESS RECEIVED THE NATIONAL ENERGY GLOBE AWARD QATAR 2015 FOR THE AWARENESS PARK (KAP), REPRESENTING QATAR TWO AWARDS FOR CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY (KAHRAMAA WINS BEST CSR AWARD IN THE ENERGY SECTOR FOR TARSHEED PROGRAM) TWO INTERNATIONAL AWARDS FOR “THE DROP” CAMPAIGN FOR WATER CONSERVATION FROM LYNX DUBAI & MARCOM NEW YORK

3 YEARS UNDER THE PATRONAGE OF H.H. EMIR, KAHRAMAA CELEBRATED 3RD TARSHEED ANNIVERSARY WITH 13% DROP IN PER CAPITA CONSUMPTION OF ELECTRICITY AND 14% IN WATER SINCE 2012

12%

FEMALE EMPLOYMENT IN TOTAL WORKFORCE

12% 35% 4

FEMALES IN MIDDLE MANAGEMENT

QATARIZATION RATE

47MIL KAHRAMAA Sustainability Report 2015

WORK HOURS WITHOUT LOST TIME INJURY (LTI)

All services for customers, companies, consultants and contractors have moved online

100%

Year-to-date (YTD) biological water quality compliance at

97.7%

KAHRAMAA signed an agreement with Qatar Electricity and Water Company (QEWC) to construct a reverse osmosis (RO) desalination plant KAHRAMAA tightens grip on Conservation Law In accordance with the newly amended provisions in Law number 26 of 2008 promulgated through the Law number 20 of 2015 H.E. Sheikh Abdullah Bin Nasser Al-Thani, the Prime Minister and Minister of Interior, laid the foundation stone for the Strategic Mega Reservoirs Project to secure water supplies in Qatar on May 12th 2015 KAHRAMAA opens new Service Centre in Industrial area KAHRAMAA updated its Customers’ Electronic database Coordinated with the Ministry of Municipality and Environment to enact new government regulations to eliminate the use of incandescent light bulbs in Qatar KAHRAMAA launched early alarm system at desalination plants

99.5%

of our procurement budget was attributed to local suppliers

KAHRAMAA managed to keep the high quality performance indicators of the electricity network and reduce faults in June, July, and August 2015 Tarsheed and the Higher Committee for Projects and Legacy (SC) launched “Tarsheed 22” to promote awareness of energy conservation in Qatar’s schools;

LAUNCHED WHATSAPP SERVICE AND AN UPDATED VERSION OF THE KAHRAMAA SMARTPHONE APP

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KAHRAMAA Sustainability Report 2015

INTRODUCTION FROM H.E. MINISTER OF ENERGY AND INDUSTRY

IT IS CRITICAL THAT WE KEEP UP-TO-DATE WITH GLOBAL TRENDS IN SUSTAINABLE DEVELOPMENT, ENVIRONMENTAL PRESERVATION, AND THE PROPER MANAGEMENT OF WEALTH AND VITAL RESOURCES, INCLUDING WATER AND ENERGY.

H.E. DR. MOHAMMED BIN SALEH AL-SADA MINISTER OF ENERGY AND INDUSTRY

U

nder the wise leadership of H.H. the Emir Sheikh Tamim bin Hamad Al-Thani, Qatar continues in its pursuit of becoming a modern, outward-looking state, capable of rising to the challenges of the modern era. To achieve this vision, Qatar is committed to its far-reaching development strategies, laid out in the four pillars of the Qatar National Vision 2030 and the National Development Strategy 2011-2016. These development strategies span economic, environmental, human and social levels. The Ministry of Energy and Industry understands the importance of sustainability when it comes to achieving our ambitious long-term development goals. It is therefore critical that we keep up-to-date with global trends in sustainable development, environmental preservation, and the proper management of wealth and vital resources, including water and energy. Through KAHRAMAA, we support the efforts of the State of Qatar in the field of conservation and energy efficiency. The National Program for Conservation and Energy Efficiency “Tarsheed” has succeeded in reducing per capita electricity and water consumption by 13% and 14%, respectively. The success of Tarsheed has motivated us to continue to support the program, with the aim of reaching its ultimate goal of achieving reduction in per capita water consumption by 35% and electricity by 20% before 2017. KAHRAMAA’s core objectives include delivering high standards of health, safety and social responsibility, attracting and retaining talent, supporting Qatarization, enhancing customer services, and addressing regulatory changes in the energy, water and district cooling markets. To ensure a high quality, reliable and sustainable supply of electricity and water, we focus on cost reductions, operational efficiency, resource conservation, diversification of sources and implementation of new technologies. All of these strategies help us achieve

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our central mission of providing high quality supplies of electricity and water while minimizing costs, reducing carbon emissions, and promoting sustainable environmental development. KAHRAMAA reaches out to all stakeholders and institutions operating in the state, so together we can support sustainable development across Qatar. This sustainable development will involve implementing strategic projects and developing services under the Smart Enterprise System to ensure the provision of a stable supply of water and electricity for the people of Qatar. All of KAHRAMAA’s development strategies will contribute towards the organization’s long-term aim: by 2030 KAHRAMAA people, assets, systems and processes will set a global benchmark for performance, technological innovation, environmental sustainability and social responsibility in electricity and water sector.

KAHRAMAA Sustainability Report 2015

INTRODUCTION FROM H.E. KAHRAMAA PRESIDENT

KAHRAMAA IS COMMITTED TO DIVERSIFYING ITS SOURCES. WE ARE ALSO FOCUSED ON PROVIDING AND PROMOTING INVESTMENT OPPORTUNITIES, MONITORING TRENDS IN RENEWABLE ENERGY AND WATER PRODUCTION TECHNOLOGIES, AND ESTABLISHING LINKS BETWEEN KAHRAMAA AND OTHER GOVERNMENT PARTIES SO WE CAN WORK TOGETHER TO DEVELOP RENEWABLE ENERGY IN QATAR.

T

HE ENG. ESSA BIN HILAL AL-KUWARI PRESIDENT, QATAR GENERAL ELECTRICITY AND WATER CORPORATION

he State of Qatar continues to pursue a clear sustainable development strategy, incorporating the effective management of its natural resources and the promotion of the rights of future generations. This strategy combines harmonized economic and environmental policies as per the Qatar National Vision 2030 with the wise leadership of H.H. Sheikh Tamim bin Hammad Al-Thani, the Emir of Qatar and our revered government. Our efforts in the field of conservation and sustainable development are in line with national and international best practices for the management of water and electricity resources. KAHRAMAA is aware of the importance of rationalizing electricity and water consumption and raising awareness of financial and economic burdens incurred by the state in order to provide these two vital resources. To encourage a culture of rationalization of water and electricity, KAHRAMAA’s Tarsheed program, which celebrated its 3rd anniversary in April 2015, raises awareness of conservation among Qatari society. The program’s successes include reducing carbon emissions by approximately two million tons, reducing consumption of gas needed for generation of electricity and water, and water and electricity consumption. Our strategies to reduce water and electricity losses and improve energy efficiency are based on three pillars: awareness, education and community development. Combined with laws and regulations, new technologies, and consumption tariffs, we made savings of approximately QR800mn up to 2015.

to developing comprehensive renewable energy and water technology strategies to be implemented across the State of Qatar. We are also focused on providing and promoting investment opportunities, monitoring trends in renewable energy and water production technologies, and establishing links between KAHRAMAA and other government parties so we can work together to develop renewable energy in Qatar. KAHRAMAA aims to install 200MW of renewable generation by 2020, comprising 2% of projected grid demand. As a customer centric organization, all our development efforts are based on stakeholder materiality studies alongside engagement activities and initiatives. KAHRAMAA supports Qatar’s steady movement toward an overall smart energy approach through the installation of smart grid projects, such as smart meters, and related technologies. Adding IT component to power distribution infrastructure aims to benefit both consumers and energy providers, while ensuring an optimized usage of energy. These projects also enable KAHRAMAA to optimize energy consumption and promote energy efficiency.

KAHRAMAA is committed to diversifying its sources, and we have made significant progress in the field of renewable energy, particularly solar energy. Utilizing solar power in the water and electricity sector enables us to improve efficiency and reduce fuel consumption. To advance our use of renewable energy, we are committed

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KAHRAMAA Sustainability Report 2015

ABOUT KAHRAMAA

“THERE ARE OPPORTUNITIES FOR RESOURCE CONSERVATION ACROSS ALL STAGES OF OUR VALUE CHAIN AND KAHRAMAA IS WORKING WITH OUR SUPPLIERS, OPERATIONS AND CUSTOMERS TO ACTIVATE THEM.” ENG. AHMED AL-NASR, TEHNICHAL AFFAIRS DIRECTOR

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KAHRAMAA Sustainability Report 2015

Who We Are and What We Do Qatar General Electricity and Water Corporation, “KAHRAMAA” was established in July 2000 to regulate and maintain the supply of electricity and water to customers in Qatar. Nowadays the company has the privilege of being the sole transmission and distribution system owner and operator (TDSOO) for the electricity and water sector in Qatar. WHAT WE STAND FOR

Our Mission

Our Vision

Providing high quality and sustainable electricity and water for better living in Qatar.

By 2030 our people, assets, systems and processes will set a global benchmark for performance, technological innovation, environmental sustainability and social responsibility in electricity & water sector.

Our Values Customer Centricity Placing the customer at the heart of decision making to ensure a relentless focus on the customer’s needs. Performance and Responsiveness High standards of efficiency and effectiveness to meet the needs of KAHRAMAA and its stakeholders. Teamwork Working with colleagues in an open, collaborative and trusting way to deliver corporate objectives. Transparency Undertaking business activities in an open and transparent manner that fosters trust. Loyalty Remaining faithful to KAHRAMAA, supporting its objectives, and being proud of its achievements.

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KAHRAMAA Sustainability Report 2015

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PRODUCTION OF ELECTRICITY AND WATER DESALINATION

IPWP

KAHRAMAA SUPPLY CHAIN

Our Value Chain

There are opportunities for resource conservation across all stages of our value chain and KAHRAMAA is working with our suppliers, operations and customers to activate them. Our company is responsible for forecasting electricity and water demand in Qatar via direct interfacing with customers. This includes setting the regulations, standards, and codes of practices for electricity and water supplies to buildings and facilities. We are also closely involved in initiating and negotiating with IPWP developers for the construction of new power stations and desalination plants, as well as reviewing IPWP project designs and specifications.

KAHRAMAA OPERATIONS

TRANSMISSION

Our Management Approach ALIGNMENT WITH QATAR NATIONAL VISION 2030 As a supplier of water and electricity, KAHRAMAA has a unique role to play in conserving Qatar’s resources and reducing the environmental impact of the use of natural resources. It also has a strategic opportunity to align and support the pillars of the Qatar National Vision 2030 (QNV 2030) and the key tenets of National Development Strategy (NDS), relating to human development, social development, economic development and environmental development.

DISTRIBUTION

CUSTOMER

KAHRAMAA CUSTOMERS

DELIVERY

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The government of Qatar encourages its entrepreneurial citizens to invest in the power generation and water desalination business, adopting global trends of deregulation. These entities are known as Independent Power and Water Providers (IPWP). With Qatar Petroleum (QP) as their sole source of natural gas as fuel, the IPWPs operate desalination plants and gas fired electricity generation plants. KAHRAMAA purchases electricity and water from the IPWPs and distributes them to end users along its own water networks and electricity lines.

RESOURCE CONSERVATION

Our conservation efforts enhance our technical efficiency and market resilience. Our people-centered programs foster local talent and employment opportunities. We support R&D and other efforts to improve our water quality and the health outcomes of our employees and customers, i.e. every single person in Qatar, thus promoting human development. By developing a strategic water reserve, we are ensuring that our society has the long-term resilience and security it requires to carry on without worrying about that most critical of human needs, water. Our Tarsheed program, and multiple KPIs across every department, are focused on the conservation and sustainability of our environmental and financial health, ensuring that future generations have the resources and opportunities that we have today.

KAHRAMAA Sustainability Report 2015

Our Governance As per Emiri Decree no. 35/ 2014 to organize KAHRAMAA, Qatar’s Minister of Energy and Industry sits at the head of KAHRAMAA’s governance structure, overseeing and approving our strategic direction, while the President of KAHRAMAA manages the organization. Although the highest levels formulate our overall strategy, the responsibility for developing and implementing our approach to sustainability is shared across our departments. In 2014, we established a Sustainability Task Force, which was in operation throughout 2015. The Task Force consists of representatives from across the organization, all of whom received a GRI G4-certified three-day initial training in sustainability and reporting, in accordance with the GRI G4 guidelines. CODE OF BUSINESS AND QUALITY MEASURES KAHRAMAA’s day-to-day operations are guided by our Code of Business Conduct, which covers issues such as conflicts of interest, non-discrimination, and health and safety. Our Legal Affairs department monitors any violations of our Code of Business Conduct. AUDITS AND ACCREDITATION We value quality at KAHRAMAA, and continue to conform to ISO 9001 (2014) in our corporate policies. In 2015, we received new certifications in our Conservation and Energy Efficiency, General Services, and Finance departments, and renewed certifications in our Electrical Networks Planning and Water Projects departments. In 2015, our Internal Audit Committee completed 14 audits, surpassing our target of 8. These audits included Risk Management and Performance Management reports, and in coordination with the IT department, we also completed the Security Matrix. HUMAN RIGHTS Our Health, Safety and Environment Department regularly audits sites to ensure compliance with

KAHRAMAA’s requirements and Qatar’s Labor Law and Environmental Law. We do not have a formal human rights policy, but acknowledge the importance of the issue in the Middle East and North Africa (MENA) region and terminate any non-compliant contract. RISK MANAGEMENT Our risk management strategy was implemented in 2015 to identify and assess potential risks and to take steps to reduce their impact. The Corporate Risk Register was formed to establish risk management governance. The Register identified the top 26 risks KAHRAMAA faces, and these risks were evaluated and prioritized in line with their likelihood and potential impact. We have established a Risk Management Committee and appointed a Risk Officer. All KAHRAMAA employees are responsible for identifying and managing risks in accordance with our internal procedures. MEMBERSHIP AND ASSOCIATIONS KAHRAMAA is member of a number of national and international organizations, which help us to develop best practices and promote our approach to sustainable business: • Arab Union of Electricity • Gulf Cooperation Council Interconnection Authority (GCCIA) • Standing Committee of Water Resources (GCC and Qatar) • International Council on Large Electric Systems (CIGRE) • Secretary-General on CIGRE GCC • Active participant in UN COP events • GCC Electricity and Water Conservation and Customer Service Committee • Arab Renewable Energy & Energy Efficiency Committee • GCC Benchmarking Committee Experts Municipality Follow-up Committee

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KAHRAMAA Sustainability Report 2015

Summary of Our 2015 Performance Across All Dimensions of Business Excellence Dimension of business excellence Asset Excellence

Definition Asset excellence is about ability to design, build and maintain infrastructure assets efficiently and effectively, in order to provide high quality and reliable supply of electricity and water, reducing transmission and distribution losses.

Phase 1 Corporate Objectives 20142018

Alignment with Qatar National Vision (QNV) Selected KPIs

Optimize asset performance.

Preserving water and energy resources

Provide high quality supply of water and electricity.

Optimum exploitation of hydrocarbon resources, establishing a balance between reserves and production, and between economic diversification and the degree of depletion Building environmental awareness among the population Encouraging environmentally sound technologies

Unit

Actual KPI value 2015

Level of actual achievement versus target

Targeted value 2015

Total electricity losses (NRE) (real + apparent losses)

%

14.55

76%

Total water losses (NRW) (real + apparent losses)

%

16.48

91%

15

Electricity reserve margin

%

21

96%

20

Electricitysystem minutes lost (SML)

Min.

2.03

148%

3

Water reserve margin

%

2

56%

10

Overall water quality

%

97.7

100%

98

Water strategic storage (KM)

Days

2.4

90%

3

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Operational Excellence

Operational excellence is about ability to run core operational processes, systems and controls in order to maximize safety and efficiency.

Enhance processes and systems

Improve corporate governance and risk-management.

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A knowledgebased economy characterized by innovation; entrepreneurship; excellence in education; a worldclass infrastructural backbone; the efficient delivery of public services

A knowledgebased economy characterized by a transparent and accountable government

Avg. electricity connection efficiency (inspect + connect)

Days

7.9

76%

6

Avg. water connection efficiency (inspect + connect)

Days

7.6

79%

6

# of processes # to be automated

14

88%

16

% of projects completed as per plan

%

74.50

83%

90

# of open noncompliance issues on audit reports

#

100

100%

100

KAHRAMAA Sustainability Report 2015

Dimension of business excellence People Excellence

Community and Social Excellence

Definition People excellence is about providing employees with work environment and career opportunities in which they can perform at their best.

Community and social excellence is about positively impacting the Qatari population.

Phase 1 Corporate Objectives 20142018

Alignment with Qatar National Vision (QNV) Selected KPIs

Unit

Actual KPI value 2015

Level of actual achievement versus target

Targeted value 2015

Ensure a safe and Participate in a wide healthy working variety of cultural and environment. sports activities

# of losttime # injuries per 1 million man hour

5

>

Attract, develop and retain a highperforming workforce and support Qatarization.

% Qatarization

%

35

92%

38

% of employees satisfaction

%

67

103%

65

Electricity per capita consumption

KWh/ day

41.5

99%

41

Water per capita Liters/ consumption day

586

94%

550

Increase social advocacy and environmental compliance

A solid grounding in Qatari moral and ethical values, traditions and cultural heritage Increased opportunities and vocational support for Qatari woman

A proactive & significant regional role in assessing the impact of climate change and mitigating its negative impacts, especially on countries in the Gulf

0

Customer Excellence

Customer excellence is about understanding, and reacting to customer’s needs, and providing effective and efficient customer service.

Excel at customer Provide high quality service. services that respond to the needs and the desires of individuals and businesses

% of satisfied customers

%

76

109%

70

Commercial Excellence

Commercial excellence is about understanding the full cost/benefit of all decisions and identifying opportunities, and threats, to KAHRAMAA’s commercial position and optimizing decisions.

Promote regulatory changes in the energy, water and district cooling markets.

A comprehensive urban development plan for Qatar that adopts a sustainable policy with regard to urban expansion and population distribution

# of regulatory changes recommended

#

1

100%

1

# of new and revised regulations approved

#

1

100%

1

Strengthen financial performance.

· Open and flexible economic structures capable of competing in a changing world

Water unit cost

QR/ m3

6.10

98%

6.0

Electricity unit cost

Dhms/ kwh

23.09

87%

20

LEGEND TO THE COLUMN ‘LEVEL OF ACTUAL ACHIEVEMENT VERSUS TARGETED’ Performance meets or exceeds targets (>=90%)

Performance falls below expected targets (70-89%)

Performance falls significantly short of targets (