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Qalaa HoldingsCommunication on Progress for 2018
January – December 2018
This cop is available to all our stakeholders on our website: qalaaholdings.com
Social - education & Human capital Developmen
t
economicen
vironmental
Qalaa Holdings
a regional pioneer in Sustainability and In
clusiv
e G
row
th
Statement of Continued Support by the Chairman
and Founder of Qalaa Holdings ..........................................................3
Introduction .........................................................................................4
• AligningourPortfoliowiththeSDGs...................................................................5
Education & Human Capital Development .. .....................................6
Environmental Initiatives ... ................................................................7
Description of Facts .............................................................................8
• HumanRights......................................................................................................................8
• Labor........................................................................................................................................8
• Environment.......................................................................................................................8
• InvestinginCleanandAffordableEnergy........................................................10
• Anti-Corruption.................................................................................................................11
• SocialInvestment..............................................................................................................12
• AFocusonERC...................................................................................................................13
Integrated Education Support Program ... ........................................14
Qalaa Holdings’ Partnerships for the Goals ......................................15
The Way Forward .................................................................................16
contents
qalaaholdings.com • 3
To our stakeholders:
IampleasedtoreaffirmthatQalaa HoldingssupportstheTenPrinciplesoftheUnitedNationsGlobalCompactintheareasofHumanRights,Labor,Environment,andAnti-Corruption.
Inthe2018CommunicationonProgress(COP),wedescribeouractionstocontinuallyimprovetheintegrationoftheGlobalCompactanditsprinciplesintoourbusinessstrategy,culture,anddailyoperations.Wealsocommittosharingthisinformationwithourstakeholdersusingourprimarychannelsofcommunication.
Sincerelyyours,
Ahmed Heikal,Chairman and Founder, Qalaa Holdings
Statement of continued Support by the chairman and Founder of Qalaa Holdings
qalaaholdings.com • 4
Introduction
Qalaa Holdingsisproudtomarkanotheryearofsteadyyetsignificant
progress on all fronts in our effort to becomemore sustainable and
promotesustainabilityinEgypt.Responsibleinvestingandoperational
practiceshavebeenatthecoreofthecompany’sapproachsincewe
beganoperating in 2004.Wehave always selected investments that
generate positive returns both in terms of shareholder profits and
community benefits, such as job creation, knowledge transfer, and
initiativestargetedtomeetcommunityneeds.
Asaholdingcompanywithsubsidiaries innumerouscriticalsectorsof
theeconomy,QalaaHoldinghasalsoplayeda key role in the region’s
development story.Whether it’s thecompletionofourUSD4.3billion
refinery (Egyptian Refining Company), which will curb Egypt’s
present-day diesel imports by c. 30%-40%, the growth of our energy
distribution subsidiary TAQA Arabia and solid waste management
companyTawazon,orourfocusonincreasingexportcapacityatASCOM
CarbonateandChemicalsManufacturingandGlassRock Insulation,we
remainedcommittedtooursustainabilityandsocially-drivenpractices.
Movingbeyondourprioritizationofbothprofitandimpactinourinvest-
ments,Qalaa Holdings is a vocal advocate for sustainable and ethical
businesspracticesinEgypt’sprivatesectorcompanies.Inourefforttolead
byexample,wehaveadopted theUnitedNationsSustainableDevelop-
mentGoals(SDGs)intheareasofHumanRights,Labor,Environment,and
Anti-Corruption.Throughan intensivemulti-yearprocess,wehavebeen
working toalignourcorebusinessportfolioandESGpracticeswith the
SDGs,theirindicators,andkeygoalsandpriorities.Tomaximizeourimpact,
wehavechosentofocusonachievingthefollowing6goalsthatalignwith
Qalaa Holdingsroleasaregionalleaderinenergyandinfrastructure:
• QualityEducation(SDG4)bywayoftheQalaa HoldingsFinan-
cial ServicesCenter, scholarships offered through subsidiaries and
corporatefoundations,skilldevelopmentprograms,financialaidto
underprivilegedstudents,andotherprograms.
• AffordableandCleanEnergy(SDG7)bywayof investments in
cleanerfuelandactivelyworkingtolowerharmfulemissions.
• DecentWorkandEconomicGrowth(SDG8)bywayofdevotion
to the health, safety, and welfare of employees and job creation
throughourinvestments.
• Industry,InnovationandInfrastructure(SDG9)bywayofcon-
siderableinvestmentsinrenewableenergy.
• ResponsibleConsumptionandProtection(SDG12)bywayof
compliance,productiveenergy,andwastemanagementpolicies.
• Partnerships for theGoals (SDG17) byway of aligning invest-
mentswithEgypt’seconomicgoalsandengaging inpartnerships
topromotethegoals.
Thisyear’sCOP,inadditiontoprovidinginformationandKPIsbasedon
UNGCrequirements,highlightshowourinvestmentsandESGprograms
directlylinktotheSDGs.Wehopetheclear,concreteprogressthathas
beenmadebyQalaa Holdingsanditssubsidiariesisthestartingpoint
ofajourneywherepublicandprivateinterestscanconvergetocreatea
stable,prosperoussocietyandinclusiveeconomies.
Qalaa Holdings
Communication on Progress for 2018
TAQA Arabia uses solar panels in an effort to invest in cleaner fuels and lower emissions of harmful greenhouse gases in line with our commitment to SDG 7: Affordable and Clean Energy.
qalaaholdings.com • 5
The Egyptian Refining Company (ERC), our USD 4.3 billion
second-stageoil refinery inGreaterCairo,willbe filling thesupply
gapforhigh-valueEuroVdiesel(thecleanestfuelofitstypeinthe
world).ERC’s feedstock is fueloil,which is currently consumedas
fuel.Therefiningprocesstoproducelighterproductssuchasdiesel
removessulfur.ERCwill thuspreventthereleaseof96,000tonsof
sulfur currently emitted, which represents a reduction of 186,000
tons inannualSO2emissions.Thisequatestoa29.1%reduction in
thetotalamountofSO2currentlyemittedinEgyptfromtheburning
ofsulfur-containingfuelssuchasfueloilanddiesel.
TAQAArabia,ourenergysubsidiary,hasalsorecentlytakensolidsteps
toinvestinalternativeenergy,includingwindandsolarpowerprojects,
to help meet Egypt’s growing energy needs after the government
announced the introduction of new feed-in tariffs for renewable
energy.In2017,thecompanycompletedfinancingofanEGP1.35billion
investmentina50MWsolarpowerplantinAswan,Egypt.
WeinvestedinNileLogisticsin2006tocapitalizeonthepotentialof
fuel-efficient, environmentally friendly river transportation. One river
bargehasthesamecapacityas20-40truckloadsbutrequiresafraction
of the fuel and money to operate. Nile Logistics operates three
subsidiaries thatofferstevedoringandriver transportationservices in
EgyptandSouthSudan.InEgypt,NileLogistics’subsidiariesoperate
a stevedoringon anchor service in various Egyptianports aswell as
acontainerfeederserviceacrosstheSuezCanal.NileLogisticshasa
strongfleetthatallowsittotransportcargoalongtheNileRiver.
Tawazon,oursubsidiaryforinvestmentinthesolidwastemanage-
ment industry,hasbeenprovidingbiomassandRDFasalternative
fuels toheavy energy consumers such as cement factories for the
pastfiveyears.AsoftheendofNovember2018,thecompanypro-
vided393,298tonsofRDF,1.1milliontonsofbiomass,and1.2million
tonsoforganiccompost.
Aligning our portfolio with the SDGs
Our subsidiary Tawazon transforms solid waste into biomass and RDF, alternative fuels that can be used in heavy industries.
qalaaholdings.com • 6
Energy
erc
• mostakbaly Scholarship program: teachers 30, undergraduates 28
• School upgrade/refurbishment: 40+, benefiting 185 K students
• 3,633 students in vision program
• Vocational training 146+
• 120+ Sme projects for entrepreneurs
• capacity building training 254+ trainees
• economic empowerment for women through 72 projects funded
• 60+ participants in aSec engineering cement professional Diploma
• 15,300 thousand workers have been trained aSec academy’s training program
• master’s Degree Scholarship annaully
TaQa aSec cement IcDp
Tawazon aSec Holding
aSec engineering Dina Farms
Cement Agrifood
education & Human capital Development
2,738graduatesoftheQalaaFinancialServiceCenter
USD60mnspenttodateoncommunity
initiatives
USD5.6mnspentperyearoneducationand
environmentalinitiatives
184scholarships awarded by
QHSF
Mining
aScom nile Logistics
Transportation & Logistics
national printing company
Printing & Packaging
qalaaholdings.com • 7
Energy
• Delivers gas to almost 1 million customers
• Investing in solar and wind power
• eGp 1.35 bn invested in benban Solar park
TaQa aSec cement IcDp
• 2.5 mn tons of biomass, rDF and organic compost collected
• 385 K tons of rDF
• 1 mn tons of biomass
• 1.1 mn tons of organic compost collected
Tawazon aSec Holding
erc
• reduction of sulfur emissions by 96,000 tons
• 30% reduction in total amount of So2 emissions
• Dina Farms is using the world’s most technologically advanced and efficient irrigation systems on its 9,500 feddans of land in egypt
aSec engineering Dina Farms
Cement Agrifood
environmental Initiatives
Mining
• offers a variety of environmentally-friendly transportation and logistical services using the nile river as a backbone for transport and linking producers, exporters and importers to global and local markets
• Since 2016, uniboard has produced around 10k tons/month of duplex paper out of paper and cartoon waste, reducing egypt’s imports by 50%
• 80,000 tons of recycled paper are used
• Glassrock subsidiary produces environmentally friendly and energy efficient building materials.
• Invested uSD 70 mn to increase production capacity
• 30,000 metric tons/year of rockwool
• 20,000 metric tons /year of glasswool
aScom nile Logistics national printing company
Transportation & Logistics Printing & Packaging
qalaaholdings.com • 8
Human RightsAtQalaa Holdings,wehavepioneeredacommitment toprovidinga
minimumlivingwageforallouremployees,andonethatgoesbeyond
localregulatoryframeworks.Wecontinuetobecommittedtoensuring
ourworkers receivedignifiedwagesandourzero-tolerancepolicies for
child and forced labor.Weprovideour employeeswith life andhealth
insurance,maternityleave,anddisability/inabilitycoverage.Onehundred
percentofwomenwhowereonmaternityleavetodatereturnedtowork
in the company. Toensureourworkforce’shealth and safety,we share
circularsandawarenessemailsaboutanyemergingseriousdiseaseswhen
theyoccur.
LaborQalaa Holdings is an equal opportunity employer, which means
individuals are hired, trained, promoted, and transferred in all job
classifications regardless of their race, religion, sex, nationality, age, and
family/socialstatus.Qalaa Holdingscontinuedtoprovidelifeandhealth
insurance,maternityleaveanddisability/inabilitycoverage.
Our EmploymentGuideprovidesguidelines for theboard andgeneral
employment policies. In cases where company policies or guidelines
contradictthoseofnationallaborlawsinanycountry/regionwhereQalaa
Holdingsoperates,precedence isgiventotheapplicationof local law.
Qalaa Holdings’policiesandproceduresmightsubjecttheviolatorto
variousformsofreprimands.
Withregardstodataonourworkforce,Qalaa Holdingshas86full-time
employees, with the following gender breakdown: approximately 77
percentoffull-timeemployeesaremale,withtheremaining23percent
beingfemale.Itisnotablethat40percentoffull-timefemaleemployees
areinmiddlemanagement,15percentareinseniormanagement,and5
percentareatentrylevel. Intermsofagegroupbreakdown,thelargest
proportionofstaffarebetweentheagesof31and40(39percent),with
approximately 14 percent between the ages of 25 and 30, 28 percent
betweentheagesof41and50,and15percentbetweentheagesof51
and60.Intermsofstaffturnover,5employeesleftthecompanyin2018in
contrastto8newhires.
Qalaa Holdings’ newly launched SAP SuccessFactors Talent
ManagementSystemhasopenedthedoortoinformation-centric,target-
drivenperformanceatQalaa Holdingsandourplatformcompanies.It
helpsusachieveenhancedtarget-settingandprogressreviewtechniques,
supportandencourageefficientrewardstrategies,andeventuallyreach
Description of actions
highermotivationand retention levelsamongour talentedemployees.
TheTalentManagementPlatformcoversfourmainareas:1)maintaining
an active database for key talents across the group, 2) setting and
monitoringperiodicalmanagementtargetsandobjectives,3)processing
the performance appraisal cycle, and 4)managing the exit process for
talentedemployeesshouldtheyseektoleavetheorganization.
To ensure continuous growth and development, we have developed
comprehensive and world-class training schemes that are specific to
our industry’sneedsandpriorities. In2018,weprovidedapproximately
130hoursoftrainingtoouremployees.Moreover,closeto100%ofour
workforce participate in regular performance and career development
reviews.
EnvironmentEstablishedasamodelfordoingbusinessinastrictlycompliantmanner,
whilefocusingonsectorsthatinprinciplecanrepresentanenvironmental
hazard, Qalaa Holdings identified environmental compliance as one
of itscore imperativessince inception.Qalaa Holdings’Environmental
ComplianceStrategyisbasedonthestrictcomplianceofalloursubsidiar-
iestoallthenationalenvironmentallawsandregulationsfeaturedineach
ofthecountriesweoperate.Inaddition,Qalaa Holdings’Environmental
ComplianceStrategyensures theadoptionofvariousglobalguidelines,
managementsystemsandstandardsatboththeholdingandsubsidiaries
levelswhenrelevant.AsamemberoftheUNGC,wearecommittedtoin-
corporatingtheprinciplesandsystemsintothecompany’senvironmental
strategy.Thisincludesourfocuson:
1. Adopting a preventive approach in our investment strategy by
ensuringaverythoroughstudyforourenvironmentalimpactprior
toinitiatinganyinvestmentontheground;
2. Focusing on the efficient use of resources across all sectors to
minimizewasteandthedepletionofnaturalresources;
3.Movingourindustries,aswellasourcommunities,towardtheuseof
cleanerenergyinaneconomicallyviablemanner;
4. Introducing sustainable transport services to minimize carbon foot-
printsforbothourindustriesaswellasforthecommunitiesweoper-
atein;
5.Adhering to and investing in the latest technology for waste
management as a key solution for both global resources and the
energydilemma;
6. Improvingtheenvironmentalperformanceofourbusinessthrough
qalaaholdings.com • 9
theresearchanddevelopmentofnewtechnologies,preventingand
reducingouremissions,andminimizingourwaste;
7. Investing in compliance with health, safety, and environmental
measures;and
8.Reportingonperformanceonatleastanannualbasisandensuring
thatanyviolationisimmediatelydiscussedattheboardlevelforeach
ofthesubsidiarycompaniesandamongQalaa Holdings’boardif
theviolationisnotresolvedimmediately.
Inthisregard,beingamemberoftheUNGCentailsselectingandapplying
performance metrics, including metrics commonly used to assess
performance inourcore industries.Ouradherence to thismembership
opensachanneltoensureinternationalstandardsareappliedthroughout
our subsidiaries. In addition, Qalaa Holdings works closely with our
developmentalfundinginstitution(DFI)partnerstoenhancethecompany’s
complianceandreportingframeworks.Thisincludes,amongothers,the
adherenceto IFC’sstandardsforenvironmentalandsocialperformance.
A significant number of our subsidiaries report their environmental
performance quarterly to ourDFI partners to ensure transparency and
ongoingdialogasweworktowardimprovedenvironmentalperformance.
TheEgyptian Refining Company (ERC), ourUSD4.3 billion second-
stageoilrefineryintheGreaterCairoArea,willbefillingthesupplygap
forhigh-value EuroVdiesel (the cleanest fuel of its type in theworld),
producing2.3milliontonsofEuro5dieselperyearandreducingEgypt’s
diesel imports by around 30%-40%. ERC’s feedstock is fuel oil, which
is currently consumed as fuel. The refining process to produce lighter
products such as diesel removes sulfur from the fuel oil.ERCwill thus
reduceEgypt’sSO2emissionsby96,000tonseveryyear.Thisequatesto
a29.1%reductioninthetotalamountofSO2currentlyemittedinEgypt
fromtheburningofsulfur-containingfuelssuchasfueloilanddiesel.The
project is currently 98.9%complete and in thefinal stagesof technical
testing,withproductionsettostartinthefirsthalfof2019.
Tawazon,oursubsidiaryforinvestmentinthesolidwastemanagement
industry, has been providing biomass and RDF as alternative fuels to
heavyenergyconsumerssuchascement factoriesaswellasexporting
agri-pelletsforresidentialandindustrialheating.
OurenergysubsidiaryTAQAArabiahasalsoinvestedinseveralalternative
energyprojects, includingwindandsolarpowerprojects tohelpmeet
Egypt’s growing energy needs after the government announced the
introduction of new feed-in tariffs for renewable energy. In 2017, the
companyfinalizedanEGP1.35billioninvestmentina50MWsolarpower
plantinAswan,Egypt,whichwillbecomeoperationalin1Q2019.
Our subsidiaryGlassRock Insulation producesmineralwoolsused for
insulation in a variety of products, with a total production capacity of
30,000metrictonsofrockwooland20,000metrictonsofglasswoolper
annumas of 2018. Rockwool is a key component of greener buildings
withlowerenvironmentalfootprints.Buildingsaccountforsome40%of
theworld’sgreenhousegasemissionsduetotheenergytheyconsume.
InsulationmaterialsproducedbyGlassRockInsulationarealsothebest
waytoreducetheimpactofCO2emissions.
NileLogisticscapitalizesonthepotentialoffuel-efficient,environmentally
friendly river transportation.Nubareya, our river port inAlexandria, is a
fullyowned,70,000m2plot located3kmsouthofAlexandriaPortand
is connected with the berthing areas of the port via Nubareya Canal.
As it stands today, the servicesweuseNubareyaandourbarges for in
Alexandriaaremainlylogistics-related,suchasstevedoringandstoring.
In addition to providing biomass and RDF as alternative fuels for heavy industries, Tawazon exports agri-pellets for residential and industrial heating.
qalaaholdings.com • 10
Investing in Clean & Affordable Energy
4.3bn
USDinvestment
12
monthstocompleteBenbansolarplant
1mntonsofbiomass
70mnUSDinvestment
2.3mntonsofEuroVdiesel/year
50mwofphotovoltaicpower
385KtonsofRDF
20Kmetrictons/year
ofglasswoolproductioncapacity
4.7mntonsofrefinedproducts/year
1.35bn
EGPinvestmentsinsolarParkinBenban,Aswan
1.1mntonsoforganic
compost
30Kmetrictons/yearofrockwool
productioncapacity
40%reductioninEgypt’simportsof
diesel
1mn*clientsconnectedtonaturalgas
gridthroughTAQA
2.5mn
tonsofbiomass,RDFandorganiccompost
50Kmetrictons/year,totalproductioncapacity
*As of Nov 2018
As of 30/9/2018
qalaaholdings.com • 11
Anti-CorruptionQalaa Holdings’governancestructurehasevolvedsignificantlyoverthe
past13yearsasthecompanytransitionedfromatwo-founderstartupto
Africa’sleadingprivateequityfirmwith19platformcompaniesandfinally
toitscurrentstructureasaninvestmentholdingcompanywithanarrower
focusandasmallerportfolioofstrategicsubsidiaries.
Throughout Qalaa Holdings’ 13-year journey, maintaining good
governance has been critical in seeing us through the volatility of our
marketsandhelpingusbuildsustainablebusinessesinmultiplecountries
throughouttheregion.Weprideourselvesonalong-standingtradition
ofhavingaboardofdirectorsdominatedbyamajorityofnon-executives.
In 2018, Qalaa Holdings remained committed to strengthening the
governance function to support sustainable growth, enhance risk
management,andmaximizeefficiencyatQalaa Holdingsandacrossall
subsidiarycompanies.HavingjoinedtheIntegrityNetworkInitiative(INI)
theprevious year, the company’s determined approach togovernance
hasprogressivelyregulatedawiderangeofpracticesatQalaa Holdings
anditssubsidiarycompanies,rangingfromariskassessmentframework,
anti-fraud, and financial reporting policies to the manner in which
managementinteractswithshareholders,andthecreationofshareholder
valueacrossoursubsidiaries.Institutionalizingthecorporategovernance
processes is an ongoing, long-term objective across all our platform
companies. Equally important are the principles of fairness, openness,
and transparency, which we have worked diligently to instill as part
of our corporate culture. An interdisciplinary approach to governance
incorporatesQalaa Holdings’ management, industry platform teams,
andtheseniormanagementofsubsidiarycompaniesbywayof formal
quarterlymeetingsthroughthemanagementboards.
Thesemanagement boards also convene on an as-needed basis. This
quarterlycycleofmeetingsandreviews,culminating in themeetingof
Qalaa Holdings’ Audit Committee and Board of Directors, ensures a
rigorousprocessofparticipationbyawidecrosssectionofexecutivesfrom
Qalaa Holdingsanditssubsidiarycompanies.Qalaa Holdingsengages
the services of only themost reputable audit firms for both ongoing
statutoryauditsandduediligenceforallsubsidiaries.Strictinternalcontrols
andreportingstandardsareacornerstoneofthegovernanceprinciplesat
Qalaa Holdingsanditssubsidiaries.Financialandoperationalreportsare
transparenttoallpartieswithavestedinterest—frommanagementand
boardmemberstoshareholders.
Qalaa Holdings believes high-quality governance is a fundamental
enablerofsuperiorcorporateperformance.Thecomponentsofeffective
governancereducerisk, identify internalandexternal threats,andassist
in capturing profitable business opportunities. Qalaa Holdings’
governanceprinciplesalignthe interestsofmanagement,shareholders,
the Board of Directors, and subsidiaries, facilitating well-informed
decisions.Qalaa Holdingshascompletedaprocessofinstitutionalization
thatbeganin2013atboththeQalaa Holdingsandsubsidiarylevels.The
comprehensiveprogram included the refinementand improvementof
allsystems,policies,andproceduresthatmanagementneedstosupport
andgrowthebusiness.Newpolicydocumentsweredevelopedinparallel
with the refinement of existing charters such as the Audit Committee
andCompensationCommittee.Developedpolicies thatarenowbeing
implemented includetheriskassessment framework, inadditiontothe
anti-fraud and insider trading policies. In addition, audit committees
modeled on the Qalaa Holdings Audit Committee Charter have
beenestablished for allmajor subsidiary companies.Qalaa Holdings’
InternalAuditteamrepresentsakeyelementinitscorporategovernance
framework,withamissiontoaddvalueandimproveQalaa Holdings’
overall operations by providing relevant, timely, independent, and
objectiveassuranceandadvisoryactivities.TheInternalAuditteamassists
theorganizationinaccomplishingitsobjectivesbyusingasystematicand
disciplined approach to evaluate and improve the effectiveness of risk
management, control, and governanceprocess,which providesQalaa
Holdings’ stakeholders with reasonable assurance over the group’s
operations and strengthens the firm’s ability to maximize stakeholder
value. Qalaa Holdings’ Internal Audit function is an independent
function with functional reporting lines to the Audit Committee and
administrativereportinglinestotheChairmanandChiefExecutiveOfficer.
With a zero-tolerance approach to fraud, the Internal Audit function
has implementedanAnti-FraudPolicytopromoteconsistentcorporate
integrity, honesty, and ethical behavior within Qalaa Holdings and
its subsidiaries. This approach helps protect the organization’s assets,
reputation,andemployees.TheAnti-FraudPolicywasreinforcedbysetting
upananonymouswhistle-blowingchanneltoreceiveinformationfrom
insideandoutsidethecompanyontheQalaa Holdingswebsite.Qalaa
Holdings believes in continuously promoting and empowering the
company’scontrolenvironment.Accordingly,theInternalAuditfunction
hasdevelopedaRiskAssessmentFrameworktobefollowedthroughout
theorganization.RiskAssessmentcontributestotheeffectiveandefficient
demonstrable achievement of objectives and the improvement of
qalaaholdings.com • 12
performanceonmultiplefronts.Qalaa Holdings’InternalAuditstrivesto
ensurethepresenceoftheInternalAuditfunctionacrossallplatforms,in
itscapacitytooversee,monitor,guide,advise,andadministeritsplatform.
In addition, our Management Committee is a monthly forum that
engagesawidermanagementteamofQalaa Holdingstoreviewmarket
developmentsandprogressoncorporateinitiativesatQalaa Holdings
anditssubsidiaries.
Social InvestmentToimprovetheimpactofoursocialcontributions,wehavechosentofocusonprojectsand initiatives thataimtoachievethe fourthSDGofQualityEducation,anareathathasalwaysbeenapriority forourfounders.AsofDecember2018,over32,000peoplehavebenefittedfromthehumancapitaldevelopmentinitiativesofQalaaHoldingsanditssubsidiaries.
Recognizing the importance of education and human capital de-velopment in fosteringeconomicgrowthandsocial transformation,in2006wedonatedUSD250,000toestablish theQalaa HoldingsFinancialServicesCenter(QHFSC)attheAmericanUniversityinCairo(AUC) – the first institution in theMENA region dedicated to help-ingstudentsdeveloptheskillsandqualificationsrequiredtopursuecareersinsecuritiestrading,riskmanagement,andassetallocation.Itfosterssustainabilityinfundingthroughendowment,soundmanage-mentthroughits fully independentboard,social impactthroughitsexpansive geographic reach across Egypt, and diversity through itsfocusongenderequality.
Sincethattime,wehavedonatedUSD30,000annuallytoensurethecentercontinuestoprovidestudentswiththetrainingtheyrequiretoenter theworkforce.Todate,QHFSChasbenefited2,738graduates,researchers,andfacultymembers.
A year later in 2007,we launched theQalaa Holdings ScholarshipFoundation(QHSF)withanendowmenttoensuretheprogram’ssus-tainability.QHSFisguidedbyanindependentboardoftrusteesandismanagedbyafulltimeExecutiveDirector.
Today,QHSFhasgrowntobecomethelargestprivatesectorfundedscholarshipprogram inEgyptandhasprovided184 scholarships todate.Despiteeconomicandpoliticalchallenges,everyyearsince itsinceptionQHSFhasbeengiving15-20ofEgypt’sbrightest students
thechancetopursuegraduatestudiesabroadatleadingglobaluni-versitiesintheU.S.andEurope–ontheconditionthattheyreturntoworkinEgyptafterthecompletionoftheirstudies.Byprovidingyouthfromcities in14governoratesthroughoutEgyptwithopportunities,weareenablingthemtomakeapositiveimpactontheeconomicandsocialwell-beingofthecountry.Wearealsoproudthat45%ofQHSFscholarstodatehavebeenwomen.Duringtheirtimeabroad,scholar-ship recipients gain critical thinking skills, professional qualifications,and international connections that enable them tomake a pivotalimpactwhentheyreturntoEgypt.
In2018,wecelebrated13yearsofsuccessful,uninterruptedoperationsatQHSF.Duringthistime,wehaveprovidedstudentswiththeoppor-tunitytopursuemastersanddoctoraldegreesattopuniversitiesacrosstheworldincludingHarvard,Stanford,Oxford,Cambridge,Columbia,andWharton, tonamea few.Recognizing the crucial linkbetweendiversity and innovation,we have sought out talented youngmenandwomenfromacrossthecountry.Pastscholarshiprecipientshavecome from Cairo, Giza, Alexandria, Menoufia, Ismalia, Assiut, Minya,Qalyubiya,Dakahlia,andAswan.Ourstudentsalsohaveadiversearray
60 public school teachers were offered the opportunity to enhance their skills this year through the Mostakbaly Teachers Program in cooperation with AUC.
qalaaholdings.com • 13
ofpassionsandhavepursueddegreesinfieldsrangingfromfilmmak-ing,anthropology,andarttolaw,business,engineering,architecture,development, andmedicine. A large number of our scholars havereturnedtoEgyptandstartedtheirownbusinesses invariousfieldsfromsustainabledevelopmenttoeducation.OursubsidiariesarealsochampioningeducationwiththeirownprogramsthatmirrorQalaa Holdings’ goal toprovideeducational opportunities to thosewhootherwisehavenoaccess.
TAQAArabia,Qalaa Holdings’energydistributionsubsidiary,offerstheTAQA International Scholarship,whichgoes toward funding thestudiesofonemaster’sstudentperyearinthefieldofrenewableen-ergy,coveringbothtuitionfeesandlivingexpenses.TAQAArabiaalsoendowsanadditionalannualscholarshipforstudentsworkinginthealternativeenergysectortopursuegraduatestudiesabroadinalterna-tiveenergyorrelateddisciplines.
Seekingtoaddvaluetoouremployees’experience,westrivetocreateenvironmentswhereknowledgeexchange isbuilt intotheworkdayand facilitate vocational training opportunities. At subsidiaries likeTAQAPowerandASECHolding,localemployeeslearnfromspecialistsandengineersworkingon site.Constructionworkershired tobuildERChavealsogainedexperiencethatwillqualifythemtoworkonsimi-larprojectsgoingforward.AtASECHolding,ourteampartneredwithAUC todevelop theASECEngineeringProfessionalDiploma for thecementindustryfromwhich60+ASECemployeeshavebenefitted.
ASECHoldingalsocreated theASECAcademyProgram,whichpro-vides training in engineeringmanagement, fromwhichmore than15,300peoplehavebenefitted.
A Focus on ERCSince the construction of ERC commenced, the refinery has beenexecutingavarietyof initiativesdesignedtobenefit itssurroundingcommunities,withafocusontheneighborhoodofMostorod.Basedoncomprehensiveenvironmentalandsocialimpactassessmentstud-ies,ERChasfocuseditscommunitydevelopmentprogramon4pillars:
1. Supporting EducationThrough itsMostakbaly Scholarship Program, ERC has refurbished 40schoolsforthebenefitof100,000studentsfromthelocalcommunity.ERChasalsolaunchedtwocenterstotrain3,000teachers.Mostakbalyhasprovided5,092studentswithin-kindaidanddonated5,662prescriptioneyeglassestodisadvantagedstudentsundertheNadartyProgram.887teachershavealsoreceivedtrainingundertheprogram.Mostakbalyhas
sponsored60scholarshipsforteachersattendingtheGraduateSchoolofEducationat theAmericanUniversity inCairo.Twostudentspursu-ingmaster’s degrees at the universities of Sheffield and Ingrid in theUnitedKingdomhavealsobeensponsoredbytheprogram.ERChasalsosponsoredundergraduateeducationattopEgyptianuniversitiesfor53honorsstudentsgraduatingfromlocalsecondaryschools.
2. gEnErating incomE and JobSThrough its Mashrouy and Tamkin initiatives, ERC has sponsored thelaunchof254smallprojectstoencourageyouthandwomen’sparticipa-tioninthejobsmarket.Besideslaunchingfouremploymentcenterstolink30,000localyouthstothejobsmarket,ERChassoughttoprovidelocalswith tangible opportunities: 3,200 local residentswere involved in theconstructionofERC’s facilities. 2,489youngmenandwomenhavere-ceivedtrainingtoincreasetheirchancesofsuccessinthejobmarket,andtwospecialproductionunitshavebeenopenedtoemploylocalwomen.
3. Youth VoluntEEring and capacitY buildingYouthfromthelocalcommunityrepresentthebestchanceforspur-ringasustainabledevelopmentprocessinERC’sneighborhood.ERC’sReyada program aims to develop local youths’ human capital andpropelthemtofullparticipationinthecommunity.Todate,over100localyouthshavevolunteeredtoreceivetrainingintheareasofsocialworkandmanagement.30youngcommunitymembersalreadyholdleadershippositionsatERC’syouthinitiatives,managingexistingvol-unteerteamsandrecruitingnewvolunteers.
4. SpEcial nEEdS SupportERChaslaunchedtheTakafulprogramtomorefullyintegratestake-holderswithspecialneedsintothewidercommunity.Toachievethisgoal,ERCisworkinginpartnershipwithgovernmentinstitutionsandlocalcommunitydevelopmentassociations.
Qalaa offers training programs and on-the-job learning opportunities for local employees of subsidiaries such as TAQA Power and ASEC Holding.
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c.32kbeneficiariesfromQalaa
anditssubsidiaries’humancapitaldevelopment
initiatives*
184+scholarshipsawarded
Scholarships
*as of 31 December 2018
Integrated education Support program
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Qalaa Holdings’ partnerships for the Goals
Civil Society Academia
GovernmentInternationalSustainabilityOrganizationsandRatingsAgencies
Partneringwithlike-mindedorganizationsinpursuitofoursustainabilitytargetsallowsQalaaHoldingstolearnfromourpeersandamplifyourimpactthroughcollaborations.Internationalpartnershipschal-lengeustolinkourownsustainabilityeffortswithglobalmovementsandadoptinternationalstandardsforsustainablebusinesspractices.
Atthelocallevel,connectingwithourprivatesectorpeersandcivilsocietyorganizationshasprovideduswithsupportindevelopingprojectsfromASECAcademytotheMostakbalyprogram.Byestablishingrelationshipswithvariousgovernmentorganizations,QalaaHoldingshasaligneditsindependenteffortstopromotesustainabilitywithEgypt’sVision2030goals.Atthelocallevel,QalaaHoldingsactsasaleaderinsustainablebusinesspractices,encouragingothercompaniesandorganizationstoreevaluatetheirbusinesspracticesandprioritizepeopleandtheenvironmentaswellasprofits.
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Measurement of OutcomeStakeholder consultations take the form of an open dialog, al-lowingstakeholderstointeractandgivetheirfeedbackaboutanorganization’ssustainabilityframework.Engagingandinvolvingstakeholdersisincreasinglyseenasasocialresponsibilityofbusi-nessesandonethatisalsoclearlyalignedwithlong-termcom-mercialinterests.Stakeholderengagementisacontinuousdialogbetweenanorganizationandtheconstituentsthat impactandare impactedby itsoperations. Italsoenables theorganizationanditsrelatedstakeholderstobettermanagerisks,impacts,andopportunities,inadditiontoimplementingmitigationmeasuresinaspecificenvironment.Moreover,stakeholderengagementisacentralcomponentofinternationalbestpracticeswithregardstosustainablebusinessasdeterminedbytheinternationallyrec-ognizedGlobalReportingInitiative(GRI).
Duringthepreviousyear,thecompanyconductedastakeholderconsultationtoassessandexploreQalaa Holdings’sustainabilitypractices’ impacts and management. The consultation’s resultsidentified several recommendations on how to improve Qalaa Holdings’social,governance,economic,andenvironmentalper-formance.TherecommendationsincludedfurtheraligningQalaa Holdings’ corebusinesseswith theUNSDGsonanoperationaland communications level, raising stakeholders’ and investors’awareness regarding its sustainable development impact andreputation. With an overall positive sentiment from employees,recommendations forQalaa Holdings’ includedmore efficientemployeemanagementandaddressingstaffconcerns.
The consultationwas conducted in the form of a roundtable at-tendedbyavarietyofQalaa Holdings’stakeholdersincludingitsBoardofDirectors, employees, subsidiaries, suppliers, investors, aswell as representatives from academia, government, civil society,andblue-collarworkers.Theconsultationcoveredanumberoftop-ics,butmainlythesocial,governance,economic,andenvironmen-talperformanceofQalaa Holdings,andwasattendedbyQalaa Holdings’managementwhofullysupportedtheexercise,listenedtostakeholders’recommendations,andactivelyparticipatedinthediscussion.Indoingso,Qalaa HoldingsbecamethefirstcompanyinEgypttouseacomprehensivestakeholderconsultationtogener-ateasustainableactionplanandgoals.
Looking AheadAs a responsible investor committed to looking toour long-termimpact,weplantostrengthenourapproachtosupportthecom-munitiesinwhichweengage.
Environment:Weareexploringwaystoraiseawarenessandcommu-nicateourenvironmentaleffortsbothinternallyandexternally,andlookingtooursubsidiaryTawazontotransferknowledgethroughitsengineeringandconsultancyarms.OurMarketingCommunica-tionsteamwillfurtherimproveourenvironmentalcommunicationtacticsandinvolveemployeesandmediatoraiseawareness.
Society: We will work with our subsidiaries to identify initiativesrelatedtotheircorebusinessactivity.Wearealsoexploringpossiblepartnershipswithacademicinstitutionstotransferourknowledgeandexperience.Partnershipswithotherprivatesectorplayerstoad-dresssocietalchangearekeytoQalaa Holdings’2019plan.
Economy:Qalaa Holdings is currently workingwith the Egyptiangovernmentandanumberofotherprivateandpublicinstitutionstoimprove Egypt’s energy efficiency through its subsidiaries ERC andTAQAArabia.ERCisexpectedtogoonlinein2019.TAQAArabiasignedanEGP1.35billioncontractwithIFCtofinancea50MWpowerplantthatwillbepartofEgypt’slargestandfirst-of-its-kindgrid-connectedsolarpowerpark.Theplantwillbepartofalargenationalcomplexof13solarpowerplantsinEgypt;operationsareplannedtostartin1Q2019.
The Way Forward
In partnership with the IFC, TAQA Arabia will finance a 50MWpowerplantthatwillbepartofEgypt’slargestandfirst-of-its-kindgrid-connectedsolarpowerpark.