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KUWAIT - Green Economy

Paul Frain

CEO, Shamal Az-Zour Al-Oula Power & Water Company, Kuwait

Bio

Paul Frain is the CEO and executive member of the board directors of Shamal Az-Zour. He graduated with a bachelor’s degree in integrated engineering systems from Manchester Metropolitan University and has a master’s of science degree in energy from Heriot Watt University in Edinburgh. He has over 25 years’ experience in worldwide power generation and water production projects. He has a background in design, project management, business development, and operations and has worked for consultants, EPC contractors, and equipment manufacturers throughout Europe the Middle East, Africa, and Asia Pacific.

"The IPO closed at the end of 2019, and the company was successfully listed on the Premier Market of the Kuwait Stock Exchange (Boursa Kuwait) in August 2020."
The only company listed in the utility sector of the Boursa and the only independently owned water and power project in Kuwait, Shamal Az-Zour Al-Oula Power & Water Company has become a leading private utilities provider in the country.
What has been the outcome since Shamal Az-Zour completed its IPO in 2019?

The IPO closed at the end of 2019, and the company was successfully listed on the Premier Market of the Kuwait Stock Exchange (Boursa Kuwait) in August 2020. Since then, we have declared slightly over KWD63 million in dividends to our shareholders. A lot of hard work was done by the Shamal team to ensure a smooth transition from a private to a public company and to manage the burden of further audit, reporting, and compliance requirements. The pandemic had a minimal impact on the company mainly because utilities saw the same, if not higher, demand. However, that demand was met thanks to our operations and maintenance teams at the Az-Zour North Phase One plant who made great efforts and sacrifices. If there had been a COVID-19 outbreak there, we would not have been able to operate the plant and generate power and water. Shamal Az-Zour Al-Oula is the only company listed in the utility sector of the Boursa and the only independently owned water and power project in Kuwait. Our customer, the Ministry of Electricity & Water, depends heavily on Shamal, and we make a significant contribution toward Kuwait’s power and water supply. Typically, it is 10% and 20% of Kuwait’s total demand for power and water, respectively, and there are times of the year when it exceeds that. This reflects the high availability and reliability of the plant and the dedication of the project and site teams.

How would you assess the need to increase the privatization of the utility sector in Kuwait?

Shamal is the only independent power and water project in Kuwait. The contract was signed in 2013, and the expectation was that it would be the start of the bigger privatization roll out, yet nine years later we remain the only IWPP. There has been a much slower roll out of the private utility industry, which is probably due to factors such as low adoption of the PPP framework by foreign investors and the global pandemic. One key item that investors look for is political stability, which Kuwait struggles to offer; however, there is some good news. The bidding documents for Az-Zour North Phase Two and Three have been prepared and published.

What has Az-Zour recently worked regarding the digitalization of systems?

We pride ourselves on our operating efficiencies and how we can increase our profits. We have digital tools to help our operators on site and have rolled out several mobile field technologies that help operators gather data from the operating plant. This data is then stored, analyzed, and reviewed to provide us with any early warning signs should there be any issues. This helps us with maintenance planning and managing our costs. We also have digital tools at the governance level and have introduced some digital board software, which helps us manage our board meetings and minutes. We will consider opportunities to digitalize business processes where efficiencies can be gained. Our expertise together with the digital technology gives us the confidence to also introduce industrial process efficiency measures.

What is Az-Zour doing to promote Kuwait’s Vision 2035?

Kuwait’s Vision 2035 has pillars drawn from the UN’s SDGs. The goals we plan to work on are the infrastructure development and advancing human capital. Our plant primarily runs on fuel gas, and as such we do have emissions; however, our emissions are reduced to the minimum as we adopt the best available technology. Our plant meets all the regulatory standards, especially Kuwait’s Environment Protection Agency standards. We monitor our emissions continuously and have a license based on those emissions. Another area where we contribute is investing in our human capital and ensuring our staff are well-trained, and we adopt the latest standards for health and safety. We actively promote education and create employment opportunities.

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