Muscat: Nama Group (NG) organised a virtual Roundtable Discussion for Economists, to continue sustain integration with key economists in the Sultanate despite the current circumstances caused by Coronavirus pandemic (Covid- 19).
The Group aims at engaging the economists and providing them with information related to the Group’s performance, in addition to discussing its strategies from an economic perspective to contribute in achieving the National Development.
The Group is moving forward towards implementing an integrated strategy to increase its efficiency and ensure the provision of safe and sustainable electricity to all customers across the Sultanate in collaboration with all relevant stakeholders.
During the event, Eng. Omar Khalfan al Wahaibi, Nama Group CEO, presented Nama Group’s major achievements and operational and financial performance in 2019. Eng. Omar highlighted HSE key indicators, represented in the decrease of the Lost Time Injuries (LTI) by 44 per cent, from 9 per cent in 2018 to 5 per cent in 2019.
The Group’s services and achievements would not have been accomplished without its Human Resources efficiency. Nama Group is represented by 100 per cent Omani leadership while Omanisation percentage across the Group reached 95.1 per cent. The Group invested around RO1.5 million, showing investment increase of 9 per cent compared to 2018.
Nama Group experienced an increase in the number of customers by 4.7 per cent comparing to 2018 reaching to 1,276,932 customers. Nama’s distribution companies also witnessed a significant increase in the customers’ satisfaction percentage on the services that reached 92 per cent based on the annual questionnaire to measure customers’ satisfaction.
In addition, Transmission Network Reliability in 2019 increased to 99.99 per cent, one of the highest percentages in the world, as well as the Unit Sold slightly increased by 0.7 per cent to reach 33,796 GWh in 2019. Further, the Group achieved a remarkable increase in gas consumption efficiency during 2019 by 10.4 per cent compared to 2018 in spite of the increase in the electricity consumption in 2019.
Nama Group continued to invest in the expansion and development of the transmission and distributions’ networks in 2019 and total Capital Expenditure stood at RO285 million. Total assets also increased by 56.3 per cent and reached RO6.9 billion in 2019. The increase in the total assets is primarily driven by increase in Right of Use of assets in Oman Power and Water Procurement Company (OPWP).
Al Wahaibi said that the implementation of the new International Accounting Standard (IFRS – 16 Leases) on the Group account in 2019 should be taken into consideration when comparing between 2019 and 2018 financial performance.
The implementation resulted in a reduction in NG’s operating revenue to RO1.25 billion in 2019 as compared to RO1.29 billion in 2018. In addition, the net profit after tax decreased to RO 60.4 million in 2019, compared to RO71.4 million in 2018. The reduction in the net profit after tax is primarily driven by the implementation of IFRS 16 in Oman Power and Water Procurement Company (OPWP).
To maintain the efficiency of the electricity network, Nama Group manages the operational efficiency at several levels: strategic programmes and projects, operational works, and operational projects for network development.
Nama Holding and its subsidiaries follow a five-year strategic plan, containing programs and plans that define the most important pillars and focal areas to achieve its vision and development goals.
Among the most significant projects and strategic programs at the Group level, related to the development of the network efficiency: the privatization program, future spot market project, network interconnection project (north-south), high voltage lines projects (400 KV), renewable energy projects, and the GCC network interconnection.
Regarding privatisation program, the partial privatisation of Oman Electricity Transmission Company (OETC) was completed by selling 49 per cent of Nama Holding shares to State Grid International Development Ltd (SGID) with total amount of 1 billion US dollar on 15 December 2019.
SGID is one of the largest operators of electricity transmission networks in the world. The OETC shares transaction was completed in the first quarter of 2020. In addition, Nama Holding intends to finalize the sale of 70 per cent of its shares in Muscat Electricity Distribution Company (MEDC). It is planned to receive the bids and complete the privatization transaction in 2020.
Furthermore, Eng. Omar presented Renewable Energy key projects. The Group is looking forward to achieving 30 per cent of the consumed electricity to be received from the Renewable Energy according to Oman Vision 2040 goals. The operations of the Dhofar Wind Project started with a total capacity of 50 MW in November 2019; a joint project between Tanweer company and Masdar from UAE and the first of its kind in the Gulf region.
The wind project consists of 13 wind turbines installed (3.8 MW each wind turbine – GE Technology) and connected to the main network system in Dhofar. The expected total annual production of the wind farm is 140 GWh.
In addition, A tender has been awarded for the construction and operation of the 500 MW Ibri Solar Project. Oman Power and Water Procurement Company, according to its strategic plan, has signed an energy purchase agreement with Shams Al Dhahira Power Generation Company, which will construct, own, operate, and finance the plant, based on the project plan. The commercial operation of the plant is expected to be completed in the second half of 2021. Also, Manah Solar I & II IPPs with a capacity production of 1000 MW were launched and Oman Power and Water Procurement Company started the tendering these two projects.
Regarding the Solar-Storage-Diesel Hybrid Projects (11 projects), Al Wahaibi mentioned that Tanweer identified a total of 11 existing diesel power plants as candidate sites to build the Hybrid Projects. Under conservative assumptions, the average projected savings are in the range of 15-25 per cent of the total generation cost.
Tanweer set out to test the market by floating an Expression of Interest in June 2018. The project captured considerable interest from 97 remarkable public and private entities. Tanweer is targeting 2020 for the announcement of the preferred bidder and expecting the total PV capacity between 40 to 50 MW.
On the transmission and distribution network, Oman Electricity Transmission Company (OETC) catered to a peak load of 6540 MW in the Main Interconnected System and 594 MW in Dhofar network in 2019. A total of 35,451,889 MWh energy was delivered to the customers.
The transmission losses in the year was 1.53 per cent. With achieving 99.9991 per cent in transmission network reliability in 2019, interruption of supply to customers was very less and the average interruption to customers was 4.7 minutes in the year.
The Interconnection Project between the Main Interconnected System (MIS), and the Dhofar Power System (DPS) will improve the efficiency and integration of Oman’s main systems, in addition to PDO network. The project will improve the dispatch economy by utilizing diverse sources of generation (such as renewables and efficient plants). The project is divided into two phases; Phase 1 until Duqm and Mahout: will include new 400kV grid stations at Suwaihat, Mahout and Duqm area with associated lines for phase 1.
It is expected to be completed in 2023. Phase 2 aims to connect phase 1 to the south and will include construction of Barik grid station and the connection of it to Nahadah and Suwaihat 400kV grid stations, expected to be completed in 2025.
The Interconnection Project will be providing stable and reliable supply to Duqm development area to attract investments and employment and develop the national economy.
In addition, the project will save oil fuel consumed in some of Tanweer area by utilising production from economic plants in the rest of the system. The project will also ensure a better utilization of the natural gas to generate the electricity and enhance network stability and security in the oil fields.
The main outcomes from the project are catering for the future demand growth at Duqm and Mahout, displacement of diesel plants at these locations which cost the government millions annually, and removing the existing constrains to develop and connect future Renewable Energy Plants with investment companies.
Furthermore, Al Wahaibi highlighted the performance and efficiency of the generation sector. Since 2005, through the introduction of progressively more efficient generation plants, OPWP has achieved a 47 per cent reduction in the gas required per unit of electricity production, as more than RO270 million have been saved.
In 2020, a further improvement is expected in gas utilisation and efficiency. This is primarily driven by Ibri and Sohar III IPPs coming on stream, and Sohar IV IWP starting operations in August 2019. After 2021, with the introduction of solar and wind plants, OPWP expects that the gas requirements for electricity generation will fall further.
As part of OPWP strategy to achieve 2040 vision, OPWP plans to procure around 1,600 MW of RE IPPs in the MIS by 2025. More than 13 per cent of the generation process will be provided by renewable energy sources, primarily solar energy. By 2026, the renewables share will reach 14.5 per cent. Total direct investment in power and water generation sector is estimated at RO3,850 million.
Nama Group CEO concluded the discussion, showcasing the Group’s sustainability projects and achievements in 2019. The total number of beneficiaries: 6,572 participants and total number of training hours: 50,534 hours.
It is worth mentioning that Nama Group celebrates this year the 15th Anniversary since restructuring the electricity sector. The Group made significant achievements in the operational and financial performance and indicators in the sector.
Since 15 years, the Group meets the growing demand for electricity that witnessed an increase in the customer base by 141 per cent, and increase in the Electricity Supply by 256 per cent. Also, the network expansion increased by 181 per cent, representing 7,529 KM in 2019.
Also, the Group witnessed an increase in the Electricity Supply by 256 per cent, equal to 33,796 MWh and the network losses decreased from 24.6 per cent to 9.6 per cent in 2019.
Even though, the gas consumption efficiency increased by 46 per cent and network reliability are maintained in at least 99 per cent for several consecutive years.
Regarding the financial performance, total operational revenue increased to 479 per cent and the Total Assets increased by 660 per cent. Nama Group intends to execute its projects based on its strategic direction, in line with the vision of Oman 2040 to make Oman among the ranks of developed countries. –ONA