Central player: Khalil Issa

Gerhard Hope , May 4th, 2009

Khalil Issa, CEO of Energy Central Company (ECC) in Bahrain, is championing the concept of integrated utility services provision.

The company’s general mandate is to serve private developments with multi-utility services. “That is our business proposition. We do not like to be labelled as a district cooling or water services utility provider, as we strive to service the specific requirements of various communities in a holistic fashion.” This has given ECC a leading edge in an increasingly competitive market

Three years in the making, ECC has its regional headquarters in the Zamil Tower in Manama in the Kingdom of Bahrain. It also has subsidiary offices in Dubai in the UAE, Dammam in the Kingdom of Saudi Arabia, and is currently setting up a subsidiary office in Muscat in Oman. “Bearing in mind that we are based in Bahrain, we serve the entire region. There are a few key developments coming up in Bahrain that we are starting to supply services to, one of them being, of course, Durrat Al Bahrain,” says Issa.

Known as the Rising Pearl or the Pearl of Bahrain, this is a residential, leisure and tourist resort being built near the southern tip of the Kingdom of Bahrain. The $6 billion project will comprise a series of 13 man-made islands covering an area of 20 million square metres. These, in turn, will be divided into six atolls (coral lagoon islands), five ‘petal’ islands (fish-shaped), a crescent-shaped island, five-star hotels, an 18-hole golf course, 12 bridges and a marina.

Master-planned

Durrat Al Bahrain is owned jointly by the government of the Kingdom of Bahrain and the Kuwait Finance House. It was designed and master-planned by Atkins Middle East, based in Dubai, and will be located 54 km from the Bahrain International Airport. It will be accessible by a two-lane highway linking it from Manama. “Of course, some of the more key developments we had in the heart of the city, as well as on the periphery, have been affected by the economic downturn. Some of the projects yet to be built have been shelved, if not cancelled, and those already under construction – being it land reclaimed or building going up – are being restaged in an attempt to finish them. The situation is no different in Bahrain, as it has been for all developers in the region,” comments Issa. “However, we feel that, even in dire times like today, there is potential for growth. If you have the right value proposition, which is accommodating to the current situation, then you should emerge unscathed.

“If we direct our value-add at the key concerns of funding, constructability and the appropriate staging of developments, then we should be able to remain a substantial player in the industry,” affirms Issa.



Potential

Commenting on the potential for the market to pick up again any time soon, Issa says simply: “I am not a great forecaster. Apparently not many are, because no one seemed to have predicted the full impact of the downturn on the global market. “What I can say is that we as ECC are definitely adapting to the new situation.” This is intertwined with the particular challenges and opportunities confronting the company at present. “Our biggest challenge is dealing effectively with the staging of developments. And, of course, obtaining the necessary funding for the associated infrastructure.

“Infrastructure is a big challenge at the moment for all utility service providers, especially in the current economic climate where you do not have full utilisation to help you defray the initial high capital outlay. Added to this is the fact that the cash-strapped state of the market makes it practically impossible to raise funds for capital-intensive projects,” explains Issa. “This means our shareholders have to shoulder a much higher burden.

Luckily there are equity funds and Islamic Shari’a compliant funding that we can tap into for investment in energy and water infrastructure. We are also looking to strengthen our relationship with the government of the Kingdom of Bahrain, which is keen to participate in long-term projects.

Opportunity

“The ideal opportunity to invest is right now, as construction costs are down and the skills pool is deeper. A year ago we had a hard time reaching out to contractors and consultants alike, whereas now they are very keen to support us. So now the balance in the market is certainly tilting favourably towards us,” says Issa.

Commenting on whether or not the ‘green’ building trend is picking up momentum in Bahrain as it has in Dubai, Issa says that while there are isolated private initiatives in this regard, it is not being driven by the public sector at all at the moment. “However, in times of crisis, you naturally want your buildings and tenants to pay the lowest cost, so energy-efficient buildings are destined to become the order of the day. This is a development that we favour very much,” comments Issa. This ties in neatly with ECC’s integrated services offering. “We not only supply communities with top-efficiency plants, but we also ensure that the customers or end users receiving those services do so in the most efficient manner possible.

“For example, if a building has been badly designed and is leaking, the most state-of-the-art central cooling plant would still incur high operating costs due to the inefficiencies inherent in the building structure itself.”

Impact

The impact on the utility services provider is higher and more unpredictable peaks in consumption, as opposed to the constant loads associated with a ‘green’ building. “This is why we favour the concept of ‘green’ buildings because we will be able to avoid those peaks and troughs,” explains Issa.

In terms of the overall district cooling market in the Kingdom of Bahrain, Issa says it is rated for 300,000 to 500,000 tons over the next three to five years, which means there is plenty of scope for future growth.

For example, ECC has clinched a 22-year Energy Performance Contract (EPC), comprising about 20,000 tons of district cooling, for the Saudi Basic Industrial Corporation’s (SABIC) Hadeed facility based at Al-Jubail, Saudi Arabia.

The district cooling will support both human comfort and process operations. Issa reveals the project is currently under construction, and ECC is expected to be supplying chilled water “within the next year or so.”

Meanwhile, the first modules of the company’s desalination plant at Durrat Al Bahrain “will be operational early next year as well.” The total capacity of the desalination plant, when fully operational is 36,000 cubic metres daily (CMD). ECC has already purchased two temporary SWRO plants having a total capacity of 2,000 CMD. This will meet the initial irrigation demands at Durrat Al Bahrain.



Biography of Khalil Issa

A civil and environmental engineering expert by education, Khalil Issa brings 18 years’ of extensive industry experience and knowledge to Energy Central Company (ECC) in Bahrain. With proven experience in business management, corporate planning, marketing and engineering, Issa was instrumental in establishing ECC. He has been founding CEO since the company’s inception in 2005.

Beginning his career in the US as marketing engineer for Trane, a global leader in air-conditioning systems, for almost five years, he then progressed to marketing manager for the company’s representative agent in Lebanon. Issa then relocated to Saudi Arabia as marketing manager for leading regional player Zamil Air Conditioners, ultimately advancing to the position of director: planning and business development. Issa has obtained an MS Civil and Environmental Engineering degree from the University of Colorado in the US.

Energy Central Company Fact Sheet

Year of incorporation: 2005.
Location: Zamil Tower, Manama, Kingdom of Bahrain.
Business focus: A multi-utility services company.
Company vision: Delivering enhanced communal utility services through process synergies and integrating complex value chains.
Areas of expertise: District cooling/heating, wastewater treatment, seawater desalination, power generation, transmission and distribution systems.
Board of Directors: Abdul Hakeem Yacoub Al Khayat, Dr. Abdul Rahman Al Zamil (chairman), Abdulla Al Zamil, Adnan Malik, Khaldoun Tabari (executive committee chairman), Dr. Manaf Hamza, Dr. Mohammed Khalfan Bin Kherbash, Waleed Al Jeri.
General Management: Khalil Issa, CEO; Greg Garner, commercial director; Denver Brown, director: projects and engineering; Maurizio Fenderico, chief financial officer.