qalaa holdings communication on progressqalaaholdings.com/publications-files/files/qh cop 2018...

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


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.


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.


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


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


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


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.


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


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


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.


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.


c.32kbeneficiariesfromQalaa

anditssubsidiaries’humancapitaldevelopment

initiatives*

184+scholarshipsawarded

Scholarships

*as of 31 December 2018

Integrated education Support program


Qalaa Holdings’ partnerships for the Goals

Civil Society Academia

GovernmentInternationalSustainabilityOrganizationsandRatingsAgencies

Partneringwithlike-mindedorganizationsinpursuitofoursustainabilitytargetsallowsQalaaHoldingstolearnfromourpeersandamplifyourimpactthroughcollaborations.Internationalpartnershipschal-lengeustolinkourownsustainabilityeffortswithglobalmovementsandadoptinternationalstandardsforsustainablebusinesspractices.

Atthelocallevel,connectingwithourprivatesectorpeersandcivilsocietyorganizationshasprovideduswithsupportindevelopingprojectsfromASECAcademytotheMostakbalyprogram.Byestablishingrelationshipswithvariousgovernmentorganizations,QalaaHoldingshasaligneditsindependenteffortstopromotesustainabilitywithEgypt’sVision2030goals.Atthelocallevel,QalaaHoldingsactsasaleaderinsustainablebusinesspractices,encouragingothercompaniesandorganizationstoreevaluatetheirbusinesspracticesandprioritizepeopleandtheenvironmentaswellasprofits.


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.

qalaa holdings communication on progressqalaaholdings.com/publications-files/files/qh cop 2018...

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