KEEPING UP WITH DEMAND

Oman 2017 | ENVIRONMENT & UTILITIES | INTERVIEW

TBY talks to Omar Al-Wahaibi, CEO of the Electricity Holding Company (Nama Group), on the history of the group, reducing losses, and diversification.

Omar Al-Wahaibi
BIOGRAPHY
Omar Al-Wahaibi is the CEO of the Electricity Holding Company (Nama Group). Previously, he was the CEO for Haya Water (Oman Wastewater Services Company S.A.O.C.) since its establishment in 2003. He holds a BSC degree in mechanical engineering from University of Manchester Institute of Science and Technology and began his career at Petroleum Development Oman (PDO), where he held several different positions, including serving in Shell Exploration and Production in the Hague from 1998 until 2001. He is also a Board Member at Oman Broardband Company, The Gulf Cooperative Council Interconnection Authority (GCCIA), and Redes Energéticas Nacionais (REN) of Portugal.

How does Nama Group effectively manage and structure its activities across multiple businesses and subsidiary companies?

Nama Holding (NH), formerly known as the Electricity Holding Company SAOC, is a joint stock company registered in the Sultanate of Oman. The company commenced commercial operations on September 16, 2003. Nama Holding holds 99.9% of the government's shares in nine subsidiaries. These subsidiary companies are engaged in the generation, procurement, transmission, distribution, and supply of electricity and water services in Oman. In 2014, NH established the Nama Institute for Competency and Development as the first training subsidiary in the electricity and water sectors.

The Nama Group saw a 7% rise in customers in 2015. What key investments and strategies were executed to achieve this growth?

First, there has been investment in generation capacity through private companies. OPWP has entered into contracts with private producers to procure electricity and water to meet the growth in demand. This is a continuous exercise because the average annual growth in number of customers is 6% since 2005 to 2015. The investment is private; it comes from various companies working in the sector at the moment. Second, there is transmission and distribution, which is basically the wires business. There is a lot of investment in electrical infrastructure to get electricity to everybody who needs it and to improve the reliability of services. In 2015 alone, we invested almost OMR400 million. This is also a continuous process as consumption per account is increasing, as is the population. For these reasons we have to keep investing in electricity infrastructure to ensure that we have a reliable service. Oman now has a high level of coverage for electricity. The group, through OPWP, has been able to improve the efficiency of gas utilization by nearly 30% since 2015. Since the restructuring of the electricity sector, we managed to reduce losses in the electricity system from 25% to less than 10% in 2015. Therefore, a lot of the work now being done is just to keep up with the growth in demand, the rising number of customers, and the enhancement of the network.

As a strategic enabler of energy infrastructure development and investment attraction, what is Nama Group's role in the diversification of the economy under Oman's 2020 Vision?

Nama Group, and the electricity sector as a whole, is an enabler for the Omani economy. Everything we do is to enable the Omani economy to achieve its full potential. In 2015 the World Bank identified electricity as one of the main drivers for the improvement of the ease of doing business in Oman. We have established a good reputation in this regard, and a lot of investors are keen to invest in new plants. We have also been asked to look into the privatization of one of the distribution companies.

What is your outlook for Nama Group over the next 12 months?

We expect steady growth to continue. We are looking to arrange financing for the next wave of investments in the electricity transmission and distribution networks. Also, there are four important areas in which the group is focusing. These are the reliability of the power supply, cost efficiency, customer service, and the safety of our staff and contractors. We have been making strong progress and improved our customer services and asset management systems. We have implemented customer service management systems and are reviewing our contracts with third parties to ensure improvements are made in the type of services being delivered. Some of our subsidiaries have already achieved ISO and health and safety certification. A lot of work has been going on, and it will continue to ensure that we provide a good and reliable service to our customers. Building on this, in the next five years we will strive to improve efficiencies and reduce our cost per unit supplied whilst at the same time ensuring reliability, customer service, and the safety of our people and work environments.