Pollen Street Capital: Beyond ESG, and Accelerating Progress by  Adding ‘Caring’ to the Priority List

Pollen Street Capital believes that its investments and business support have positive impacts for the financial services industry — and society as a whole.

It is through this lens that Pollen Street assesses opportunities to invest wisely and to help build better businesses, rather than just applying ESG checklists.

“We were recently bold enough to embed Caring as a core value in our business,” said managing director Lindsey McMurray. “Caring is going the extra mile for your portfolio companies, your investors and ultimately for the wider community. For us it is the driving force of our work.”

A Practical Approach to ESG Investing

ESG is not so much a movement in the industry as something that has well and truly arrived. For Pollen Street, it’s a core part of the investment process, from identifying ESG risks pre-acquisition to working with portfolio companies' post-acquisition to embed the ESG framework. This drives value creation and allows the monitoring of performance against key criteria.

“As we see increased focus on ESG in our industry,” says McMurray, “it becomes clear that responsible investment processes and procedures are an essential part of working practices.”

"With the climate lens there is a groundswell, people understand the climate emergency but are unsure of what they can do."

Alison Collins, director of Pollen Street Capital’s Hub and ESG Committee chair, said the firm’s portfolio companies were at different stages of maturity. “Some have well developed ESG policies, others have no formal policies in place. Some are in the early stages of implementing ESG programmes. We have an opportunity to support them and share learnings from more mature businesses, so portfolio companies do not have to start at square one.

“We are regularly blown away by the enthusiasm for ESG topics when we meet teams from new additions to the portfolio. The first gap to span is not in demonstrating the importance of ESG as this is invariably already a focus, but in helping the businesses align behind their ‘impact areas.’ Every business is positioned to tackle a specific set of issues.”

When onboarding a new business, Pollen Street works to map out its Impact Areas, aligning ESG strategy to:

the sub-sector the business operates in

the customer base

the strategy

the skills and expertise of the team.

“It is important to remember the role that the employee base can have in shaping the ESG direction,” said Collins. “Having employees at all levels championing the ESG agenda supports the values of the business and results in everyone having buy-in to drive projects forward.”

Pollen Street’s ESG committee is made up of senior sponsors and passionate team members who join the discussion and have a positive impact in setting responsible investment strategy.

Last year the firm launched its flagship ESG programme, Ten Years’ Time, with the goal of making a difference in the world by connecting its expertise with causes and initiatives that reflect its values. Pollen Street works with Blue Ventures, Future First and Big Issue Invest, sharing and using its core asset management skills.

The firm notes the importance of measuring progress and communicating successes. Pollen Street published its inaugural ESG report last year. “As well as tracking progress, reporting is a fantastic opportunity for firms to share their purpose and bring to life some tangible examples of where their work is having an impact,” says McMurray.

Pollen Street Capital: Investing with Impact

As well as embedding ESG diligence and monitoring, Pollen Street Capital aims to have a positive impact through its private equity and credit strategies, accelerating progress in financial services and beyond.

“We believe that a focus on responsible investing can lower risk and enhance financial returns for our funds and underlying investments, while also generating a net benefit for society,” McMurray said.

One of the areas where a specialist such as Pollen Street can make a difference is in supporting regional growth. With lending businesses Shawbrook and Capitalflow, Pollen Street provides support to SMEs and community development.

Lindsey McMurray said a number of businesses in its PE portfolio were lending regionally. “Capitalflow addresses rural businesses which otherwise would have limited funding options. In 2019, about 68 percent of Capitalflow’s SME customers were based outside of capital cities.”

Another of Pollen Street’s portfolio companies, Aryza, offers technology solutions that help financially vulnerable people and improve financial inclusion. During 2019, over a million consumers moved closer to financial rehabilitation and Aryza’s new digital products, My Money Options and DebtSense, are helping businesses to support their customers to resolve their debts more easily.

“With an overarching view to have a positive impact, we can make sure that lending reaches people who are underserved by traditional providers because they don’t fit the bullseye of very narrow lending practices,” said McMurray.

Pollen Street’s credit facilities have supported several green energy initiatives, improving the energy efficiency of property stock in the UK. Through focused product financing and installation solutions, the firm has helped:

Over 11,000 households to install a new boiler which increases energy efficiency and reduces energy bills

Over 9,000 households switch to renewable energy

Over 5,000 households in the provision of insulation

“With the climate lens there is a groundswell, people understand the climate emergency but are unsure of what they can do,” McMurray points out. “What we’re doing is lending to real people, giving them the tools to make a real positive impact.

“When we started investing in financial services, we could see people who perhaps kept this industry at a distance. We saw it as an integral component to enable and drive positive change across much of the economy. It is that wide-reaching influence that means that — as a financial services specialist — Pollen Street Capital can have a positive impact on society through the work that we are passionate about.”


QNB ALAHLI: Rising to the Top of Egypt’s Banking World – by Paying Attention to Quality Service

[caption id="attachment_19947" align="alignright" width="300"] Chairman & Managing Director: Mohamed El Dib[/caption]

QNB ALAHLI, established in 1978, is the second-largest private bank in Egypt, and one of the country’s leading financial institutions.

The full-service bank is organised around diversified business lines serving corporates, SMEs, individuals, professionals and financial institutions. QNB ALAHLI has established several subsidiaries in specialised fields, positioning itself at the head of Egypt’s financial and banking sector. The subsidiaries include QNB ALAHLI Leasing (founded in 1997), QNB ALAHLI Life Insurance Company (established 2003), and QNB ALAHLI Factoring Company (2012).

The bank provides services for 1,240,000 clients, served by 6,700 banking professionals and dynamic teams supported by a multinational platform. A network of 231 branches covers all the Egyptian governorates, with 611 ATMs and 54,000 point-of-sale machines.

Customer service operates around the clock, seven days a week. The attention and importance dedicated to corporate social responsibility, along with the bank’s understanding of the interconnected relationships between societal development and organisational success, is evidenced by its participation in charity projects.

QNB ALAHLI has maintained its status as a major player in the Egyptian market, and has achieved remarkable growth in loans and deposits portfolios, as well as market share. It has increased returns and maintains sound asset quality and cost ratios.

On the corporate side, QNB ALAHLI provides dedicated products for corporate banking, financial advisory, project, structured and trade financing, cash management, and foreign exchange. The competitive QNB ALAHLI offering has led to the creation of strong bonds with corporate customers of all sizes, including subsidiaries of multinationals, mid-caps, and SMEs.

When it comes to small- and medium-sized businesses, QNB ALAHLI applies a model supported via dedicated business lines. It offers specialised programmes such as consulting and financing. It was the first of the largest banks to achieve its Central Bank of Egypt targets. The SME loan portfolio was to be at least 20 percent of total loans; it recorded 23 percent – a year ahead of deadline.

QNB ALAHLI has capitalised on its leading position by developing and industrialising a world-class retail banking services. It adapted a market segmentation approach to structure its products to meet the requirements of each sector – with a personalised approach and a variety of payment solutions.

QNB ALAHLI is keen to support the world economy by consistently expanding financial services coverage and promoting financial inclusion.


Santiago Free Zone Corporation – CZFS: Loosens the Bonds, Creating Growth for the North Region & the Country

Santiago Free Zone Corporation (CZFS in Spanish) is a leading national socio-economic development consortium which prides itself on delivering excellence and innovation.

Founded on April 21, 1974, it is the administrative body of the Corporate Campus, the Victor Espaillat Mera Industrial Park (PIVEM in Spanish) and, for more than four decades, promoter of important projects that generate employment, stimulating the growth of the city of Santiago, the northern region and the country as a whole.

[caption id="attachment_19969" align="aligncenter" width="900"] Dominican Republic: Santo Domingo[/caption]

Over the past few years, the Corporate Campus has incorporated support institutions that bolster the comprehensive services offered to the large community of investors that establish themselves in the park. It promotes efficient operational management and growth through talent management, recruitment and selection through CEGESTA; professional training projects supported through Capex; medical attention with high quality standards in MĒDICA; financial support provided by Cooperativa La Aurora; and a Fire Station at the service of both the PIVEM companies and the different communities that surround the park.

Changes promoted through the corporation's different Five-Year Master Plans have designed the profile of an active and involved institution, with strong participation in projects for development and welfare, which are rooted in the park's people.

Sustainability, excellence and integrity are the main values that rule its actions, in line with competitiveness, the promotion of socioeconomic development, profitability, environmental protection, professional training and productivity of the various sectors.

Santiago Free Zone Corporation main operating principles:

Respect, protection and advocacy of human rights

Sustainability

Excellence

Integrity

Fostering the generation of high-quality jobs.

PIVEM

Based on almost five decades of experience in industrial development, the Victor Espaillat Mera Industrial Park, where more than 80 Free Zone companies operate, is a competitive facility renowned for its constant innovation. It is orientated towards productivity, competitiveness and the collective well-being of the companies, employees and the surrounding communities.

PIVEM covers nearly two million square meters. The infrastructure features tailor-made designs, led by CZFS's planning and development and engineering departments.

The expansion of the ark continued in 2020 with the construction of three new eco-industrial buildings, which added 240,000 square feet to the production for export area. These buildings are now occupied by the Swedish Match (Tobacco Manufacturing) and Boombah (Textile Manufacturing), with a joint investment and an important economic share.

As part of the park's value offer, it features a high-capacity wastewater treatment plant, an electric power sub-station, rooftop solar panels, as well as state-of-the-art telecommunications infrastructure and fiber optics throughout the entire perimeter, which are part of PIVEM's services.

In response to the COVID-19 crisis and in order to strategically respond to the situation, the CZFS Emergency Committee was created. Measures were adopted and shared to safeguard the health of all the employees of the productive community, as well as to provide support and follow-up for the safe reintegration of work and the sustained restart of the companies.

The corporation also granted the companies financial relief to alleviate burdens, preserve jobs, and redirect efforts to remain in operation, helping to continue boosting the national economy.

Subsequently, the CZFS COVID-19 Compliance Committee was created to ensure compliance with the protocol established by CZFS, as well as with guidelines and measures established by the Ministry of Health and the WHO.

CAPEX

The Innovation and Professional Development Centre is a specialised training venue for entrepreneurship and professional development through training, knowledge transfer and networking. It is an innovative concept to foster talent, professional skills and competitiveness. Capex designs and develops important entrepreneurship and innovation projects for Santiago, the northern region and the country.

The academy, installed within PIVEM, deployed an innovative educational programme using technology in 2020, connecting diverse audiences in an attractive offer for companies, professionals and the entrepreneurial community.

Capex's virtual value proposition received an admirable scale of engagement from those who were already familiar with the institution and others who joined its various digital classrooms. In 2020 alone, over 14,200 people connected and participated in its training activities.

La Aurora Co-operative

This is the financial and social support wing of PIVEM's workforce. Despite 2020's uncertainties, CoopLaAurora's members confirmed their confidence in the co-operative by increasing their savings and investments.

In addition, the CoopLaAurora mobile app was launched in 2020, with online information on the products available, and assets grew above the average for the financial sector.

CoopLaAurora promotes economic solidarity. It facilitates the acquisition of financial services and products to improve members’ standard of living, as well as education for the management of personal finances.

CEGESTA

CEGESTA is specialised in talent management with experience in industrial sites. It is focused on providing the tools and solutions to facilitate a successful recruitment process.

Before the pandemic, CEGESTA had more than 400 open positions, distributed among 25 companies from PIVEM and from companies located outside the park.

After the reopening, the centre was able to reposition itself, meeting recruitment requirements for the two largest companies in the Park, Swedish Match and Swisher Dominicana, among 13 other companies in the PIVEM and 14 in the local market.

MĒDICA

MĒDICA provides quality preventive health and outpatient care to the PIVEM's labour force and families living in the western Santiago Municipal District, and surrounding areas.

The centre was able to position itself as a real option for the comprehensive management of the health of companies and patients in general, as well as people affected by Covid-19 in 2020.

Regarding Coronavirus, MĒDICA has remained current, performing tests and screening in accordance with appropriate protocols, and providing adequate follow-up to each patient. Currently the services of IgG / IgM Rapid Tests and AG Antigens are offered, with results in no more than three hours; and PCR, with results in 48 to 72 hours.

New specialties, imaging and outpatient services will be added in 2021, such as: Internal Medicine, Cardiology, Diabetology, Nutrition, Orthopaedics, Gastroenterology and Nephrology. In addition, a hemodialysis treatment and CAT scan area will be added to complete the services with state-of-the-art equipment that allows for a proper and high-precision diagnosis.

Santiago Free Zone Corporation Firefighters Division

The board of directors is responsible for ensuring that the emergency unit is kept at the forefront of the field, in order to ensure the physical integrity of the park's infrastructure and the surrounding communities. The in-house fire station makes a significant contribution to mitigating risks to factories, employees and the community, with high-level equipment and qualified personnel who are 100 percent service-orientated.

Projects promoted under each pillar of the Santiago Free Zone Corporation broad Corporate Social Responsibility (CSR) programme enable a large number of people, from the ark's employees to their families and residents of nearby communities, to benefit from opportunities that strengthen their wellbeing and provide Santiago and the Northern Region with increasingly competitive human capital. The CSR plan is built around four main pillars: Education, Environment, Health and Entrepreneurship.


Scottish Friendly: Being the Friend that Everyone Needs in Times of Trouble

Scottish Friendly began 2020 with a clear strategy in place. No one in the UK knew how quickly the pandemic would sweep the country, or how profound the impact would be.

“We had to respond and we had to do so at pace to ensure we continued to serve the needs of our customers and protect the health of our colleagues,” said chief executive Jim Galbraith. “Within two weeks, the majority of our colleagues were working securely from home, with only those undertaking important tasks that were impossible to do from home remaining in the office.”

[caption id="attachment_19923" align="aligncenter" width="900"] Chief Executive: Jim Galbraith[/caption]

Scottish Friendly’s IT department did “a remarkable job” in ensuring that every member of staff the correct equipment to effectively and safely work from home, added Galbraith. “We continue to invest in our technology to improve remote working, with all colleagues now using Virtual Desktop Interface via the Cloud.”

With the increased risks associated with the pandemic, the firm increased its investment in cybersecurity and developed and strengthened the risk-management framework, helping to further bolster its capabilities and resilience.

“While our colleagues adapted to a new way of working, Scottish Friendly created an entirely new HR function,” says Galbraith, “supporting wellbeing with the development of initiatives – including HR drop-in sessions and online fitness classes – that developed new ways of communicating, professionally and socially.”

In addition, a voluntary Scottish Friendly working group developed a set of company values to use as guidelines through the new challenges. “I am proud to say that rather than standing still, Scottish Friendly has continued to grow, recruiting in key areas to help support us through the impact of Covid-19, in particular our customer service and contact centre functions.”

Adapting to the effects of the lockdown required a considerable investment in people and processes, all of which took time. There was no doubt that service levels had suffered at the start of lockdown, Galbraith admits, with escalating demands from customers and the need to adapt to new ways of working. “But after further investment and process efficiencies, we were able to bring service levels back up.”

Scottish Friendly is determined to continually improve the products and services it offers. “We pride ourselves on differentiating through innovation, efficient customer services and responsible capital management,” Galbraith says. “This is no different whether we are working from home or in the office.

“In spite of the current challenges we face across the UK, we remain well placed to come out of the pandemic stronger than we entered it, enabling us to continue to achieve our vision to provide long-term sustainable growth for our members.”

Organic Growth

Responding to the demands of Covid-19 and changes to the way many customers wanted to interact with Scottish Friendly, its targeted marketing activity sought out alternative distribution channels, delivered to homes. “In addition, we adapted our key messages, focusing on certainty and peace of mind through these unpredictable times.”

Targeting more individuals via a mobile app has resulted in a fifth of Scottish Friendly branded sales coming through the channel. “It continues our journey of becoming an app-first financial service provider,” says Galbraith.

Paper-based marketing activity was reduced throughout the course of 2020, helping to reduce the firm’s carbon footprint. Scottish Friendly also increased marketing activity across social media through Facebook adverts and developed a successful radio campaign in the second half of the year.

“The latter is important,” Galbraith points out, “as it offers another scalable way for us to develop our business reach. We expect to develop this alongside our app-based activity over the course of 2021.”

Processing Outsourcing

Scottish Friendly continues to work with a range of corporate partnerships, contributing to overall results. While some partners suffered due to the nature of lockdown limiting face-to-face interaction with customers, Scottish Friendly continued to restructure relationships and provide support through this difficult period. Term-assurance partners performed strongly, as more individuals and families looked to protect themselves.

“Our strategy to diversify through a range of corporate partners continues to prove successful,” Galbraith says, “smoothing out the extreme market conditions we have experienced throughout 2020. We’re confident our investment in products, technology and customer service will continue to add value for our existing partners while we seek to attract new ones.”

Mergers and Consolidation

The focus in 2020 was to further embed Canada Life’s book of life and pensions business, purchased by Scottish Friendly in November 2019. “This was the largest acquisition in our history, significantly increasing assets under management, member numbers and the transfer of new products.”

Scottish Friendly has a long and proven track record of acquiring and administering large books of insurance businesses. “We’ll continue to look for appropriate mergers and acquisition opportunities in the future,” the CEO promises.

Future Outlook

The pandemic has gone on longer than anyone could have foreseen, and is likely to be a dominant factor for the immediate future. “Scottish Friendly will continue to serve our members despite these uncertainties,” Galbraith says.

“We continue to take strength from our mutual status. We have experienced many economic cycles and have always taken the long-term view, enabling us to protect value during short-term turbulence while planning measures to enhance our asset base.

“Our 2020 financial results demonstrate our agility, flexibility, and our commitment and resilience through these difficult times. We recognise the challenges that lie ahead and our key focus remains on the health and wellbeing of our colleagues, of whom I am immensely proud.

“I extend my thanks to each and every one, who together are working hard for the benefit of our members. While the immediate future remains uncertain, we remain confident in our ability to meet its challenges.”


SegurCaixa Adeslas: The Year that Put Healthcare in Focus

It’s certain that 2020 will go down in history as the year of Covid. The pandemic has affected almost all the world’s population, and put healthcare in prime position of every country’s agenda.

Healthcare has been the main tool to battle and contain the spread of the virus, and that universal effort has hinged on the dynamic efforts and collaboration of the private sector.

Insurers made a noteworthy contribution to the battle. In Spain, SegurCaixa Adeslas was determined to protect its customers - despite the fact that the health policy explicitly excluded coverage in the event of a pandemic-. The company rapidly adopted measures to protect its employees, customers and service providers. It implemented new processes and procedures to maintain the service in challenging conditions.

Digitalisation, one of SegurCaixa Adeslas’s strategic pillars, has been strengthened to adapt to the unfolding scenario. For two years, the company has been offering the Adeslas Salud y Bienestar health and wellbeing digital platform, and that has been reinforced to bolster remote assistance. SegurCaixa Adeslas has remote guidance services and functions, including electronic prescriptions, which have minimised unnecessary trips during lockdown. That same objective galvanised the extension of healthcare provided by telephone or video-conferencing to the entire healthcare system.

In addition to the insured persons infected by covid who had to be hospitalised, a service was established by SegurCaixa Adeslas to remotely monitor insured those quarantined at home who displayed mild symptoms that could be linked to Covid-19. A team of professionals contacts them by telephone to provide support, therapeutic guidance and protection advice for the patients, and people living with them.

The speed of SegurCaixa Adeslas’s response is due to a corporate culture that places customers at the centre of any strategy, aiming to aid them in their day-to-day lives, giving them with an active role in their own healthcare and providing them with relevant information at every turn.

These commitments are at the root of innovative insurance solutions such as MyBox Health and MyBox Health Seniors, whose approach opens novel channels to ensure solid, lasting relationships. The launch of another service, MyBox Business, has been crucial for the banking insurance channel. It has been an especially difficult time for business, and SegurCaixa Adeslas has become a leader in Shop insurance.

Each year, the firm strengthens its leadership position in the healthcare insurance sector and solidifies its position as a benchmark in the whole non-life Insurance sector. Last year, it earned €3,975m in premiums, up 2.9 percent on the previous year and up 1.8 percentage points above the market average.

It has a 30.4 percent share of the healthcare market – more than its two most immediate rivals put together.


TANQIA: Blueprint for Sustainable Treatment is Blazing Trails in Water-Strapped Region

TANQIA – the first privately held wastewater collection and treatment Utility in the UAE, and across the wider Middle East Region – is a company that doesn’t lack vision.

Executive chairman of the board Ibrahim Elwan says the firm is enhancing its already state-of-the-art Wastewater Collection and Treatment System (WWCTS) in Fujairah by driving down costs, promoting sustainability and accommodating future demand.

Across the Gulf Region, water supply depends on desalinated seawater and underground aquifers. Groundwater sources are shrinking, and increasing in salinity due to over-pumping and sea water ingress. The UAE’s water supply is predominately reliant on desalination and recharging underground sources using surplus desalinated water.

The UAE government has called for compliant recycled wastewater to be maximised as a substitute for desalination and underground extraction. This reduces investments in desalination and replenishes dwindling resources.

Enter TANQIA, a regulated utility developed by infrastructure development company Elwan Group. It has the exclusive mandate to design, finance, construct, own, operate, maintain and expand the WWCTS to meet forecast demand for the duration of the concession period.

Financing of the Greenfield WWCTS was made possible by the Royal Bank of Scotland, guaranteed by Hermes, the Guarantee Institution of the Government of Germany, and a loan from Abu Dhabi Fund for Development (ADFD). The Royal Bank of Scotland loan was paid off in 2017.

Greenfield was the first central wastewater system that the government of Fujairah made possible. It started in 2005 and was operational by early 2009.

The facility spans 16 hectares south of Qidfaa and is the Middle East’s first privately held wastewater collection and treatment utility. It produces high quality treated effluent thanks to its technology-driven approach to wastewater management. TANQIA has earned renown for protecting the Emirate’s environment and is globally recognised for its efficiency.

The forecast demand for wastewater services in the Concession Area forms the basis for investment strategy to cope with unexpected population growth rate of some eight percent. Water consumption increased in tandem, at an average annual rate of nine percent.

Clean water at the lowest costs is the goal. Tariffs can then gradually increase to help cover the cost of operation and maintenance. “The utility is actually an environmental firm whose emphasis is to extract valuable resources for ‘economic recycling’ while achieving the smallest feasible environmental footprint,” says Elwan.

TANQIA’s strategy has been to avoid assuming additional debt. New investment in increasing installed treatment capacity of the WWTP was deferred, and TANQIA put in place a replacement programme for the existing plant to ensure that it could cope increased influent. The utility could then focus on boosting services in the concession area to raise revenue generation.

The targets were achieved, and the WWCN has grown to cover 526 square km. Service coverage ratio had grown by 2020 to 87 percent. The remaining 13 percent will be used to create the new commercial city centre. Wastewater generated by this segment of the population continues to be evacuated by Fujairah municipality and delivered to the WWTP for treatment.

The support of the Government of Fujairah, the Municipality of Fujairah and the Government of Abu Dhabi were crucial to the extension, says Elwan.

As part of Expansion I project, four treatment trains will be added to the Installed Treatment Capacity of WWTP. The firefighting and fire alarm system of existing WWTP and Expansion I of the plant will be upgraded to comply with new civil defence guidelines. Expansion I will also entail civil works and interior fitting of the administration building, the installation of new pipeline and treatment for irrigation in compliance with WHO standard.

The contract for civil works was awarded to UAE firm Skyline Contracting Company, while the contract for electro-mechanical works related to the design, supply and erection was awarded to German company Bioworks.

ITC will be technically audited and its Bill of Quantities (BOQ) prepared by Emscher, one of the largest water utilities in Germany. The contract to Emscher has been awarded and the pricing of the rehabilitation works should be available before financial close. In its entirety, Expansion I will increase ITC of WWTP from the 16,000 m3/day in place today to 46,000m3/day when completed.

Under the Concession Agreement, TANQIA’s Greenfield WWTS comprised a wastewater treatment plant processing 16,000 m3/day and composed of two trains (8,000 m3/day each), 179 km of wastewater collection network (WWCN), and 30 pumping stations. Combined, this system was designed to provide services to 4,725 properties.

However, since 2008 (when Phase II of the Greenfield system was completed), TANQIA continued to expand its WWCN by 11 percent. The number of properties connected has increased from 4,725 to 8,252. This represents 19,530 accounts connected to the WWCN, while the population served by TANQIA’s wastewater services increased from around 37,187 up to 116,000.

Peak wastewater generation reached 27,000 m3/day despite the fact that Installed treatment capacity has remained since 2009 at 16,000 m3/day – and the deficit in installed treatment capacity will persist until Expansion I is completed.

Analysis of the data on water consumption within the concession area shows that the peak volume of wastewater generation increased at an average annual rate of 9.7 percent for 2002–2020, and in December 2020 stood at about 27,000 m3/day.

“This unprecedented growth in water consumption and generation of wastewater requires urgent new investment to increase the installed treatment capacity of the WWTP,” says Elwan. This is coupled with systematic and gradual adjustment in tariffs to encourage conservation and the introduction of water-saving devices to reduce consumption and offset the increase in rates.”

TANQIA-SIYANA – a company fully-owned by the developer, Elwan Group – operates the WWCTS, and has managed to successfully maintain the increase in inflow to 27,000m3/day through its intensive maintenance and replacement programme.

An internal and external network connection will be created to provide wastewater services to Stages I and II of Sheikh Mohamed bin Zaid City (MBZ City), adding another 46.5 km to TANQIA’s 440 km network. The construction of the pipeline and MBZ pump station were completed in 2018.

TANQIA has made progress with the Federal Electricity and Water Authority (FEWA) on developing its effluent distribution network to provide 1.3 billion gallons of high-quality, treated effluent once completed. “TANQIA is making a significant environmental contribution, generating high-quality effluent for substitution of desalinated and underground water in non-potable usage,” says Elwan. The plant produces tertiary treated effluent suitable for restricted irrigation and industrial use.

FEWA’s Effluent Balance Tank will also include a distribution network to deliver water to MBZ City and the farms in the northern area of the emirate. TANQIA insisted on having a polishing plant using state-of-the-art technologies to make the effluent suitable for unrestricted irrigation. This decision was made following the recommendations and standards of the WHO, and supportive data on the experience of California.

TANQIA is exploring energy-efficient and green energy projects that boost sustainability and provide energy- and cost-saving opportunities. It is undertaking a 6.6 MWp solar energy project. Stage 1, a rooftop solar panel system, is expected to cover more than 37 percent of the energy requirements of the WWTP’s buildings.

Stage 2 is a solar power plant that is expected to cover 40 percent of the energy requirements of WWTP in its entirety, and allow for the generation of revenues by exchanging cheap power by trading the remaining 60 percent to other industries.

Both stages are at the design and procurement stage, with contracts awarded for Stage 1 expected by Q2 2021, and work on Stage 2 due to begin by Q4 2021. Once completed, the new additions are expected to deliver gains – not only by reducing operational cost, but from a sustainability standpoint too.

“TANQIA’s Green Energy Project will reduce the carbon footprint by about 6,415 tons of CO2 per year,” Elwan says. “This is equivalent to the average emissions generated by 1,362 passenger vehicles driven for a full year.”

TANQIA’s dedication to the environment will continue with the installation of the PV solar power plant that is expected to reach a generating capacity of 10 MW, as electricity demand escalates in tandem with wastewater generation. “TANQIA will continue its aggressive commitment to ensuring clean environment in all of its operations,” promises Elwan.

The firm shares its expertise and plays a key role in developing technologies for the advancement of wastewater treatment plant design around the world. It is assessing options to integrate well-developed processes known as “constructed wetlands” and “reed-technology” into its technology portfolio. This not only reduces energy consumption, it also contributes to providing habitat for wildlife. Products considered as waste before will be fully converted into valuable resources, exemplifying true circular economy.

“In this region, we are facing shortages in fertile land but missing out opportunities making our beautiful country more self-sustainable, by disposing resources which can make it fertile at the same time,” notes Elwan. TANQIA converts the by-product sludge into valuable soil with the reedbed technology. Current projections show that up to 65,000m2 of land are required until 2037, without any addition of chemicals and without any input of energy, other than sunlight. Valuable soil will be produced during a natural process within a period of about seven to ten years.

It can then be made available for landscaping or farming. Given the minimal degree of automation and mechanical equipment required, this can be implemented at least-cost and with minimum CAPEX-requirement.

In 2018, TANQIA SIYANA FZC was certified with the internationally recognised occupational health and safety management system standard OHSAS 18001:2007, alongside the environmental management system standard ISO 14001:2015 and the quality management system standard ISO 9001:2015 for its services on water and wastewater projects and systems.

TANQIA had identified measures at aiming reducing its environmental and carbon footprint well before ratification of the Paris Agreement. Currently, 13 measures have been identified aiming at the reduction of carbon dioxide emissions, some prior to the agreement. Others were implemented after its ratification and are already contributing to carbon dioxide emission reductions.

Overall, by the end of 2020, a total of 47,296 tons of CO2 were saved, contributing to the UAE’s effort of meeting the Paris Accord’s targets.

However, measures identified to have the most important impact on TANQIA’s climate protection efforts are part of Expansion I after its completion. TANQIA has extended its reach to explore and pursue projects beyond the UAE’s borders. Pursuing such projects is testament to the award-winning firm’s unerring emphasis on quality, efficiency and sustainability at every step, with protection of the environment a top priority.

In projects across the Middle East and the Mediterranean countries of the EU, TANQIA insists that no treated effluent would be discharged below the tertiary stage, and that it would also be polished. The polishing process targets mainly viruses, bacteria and parasites, but also involves the removal of remaining suspended solids, biological oxygen demand (BOD) and other traces of pollutants that may be left after secondary effluent treatment.

TANQIA’s principled approach provides multiple opportunities for reuse of the polished tertiary treated effluent for economic purposes, although the major impediment in the countries of the Gulf Region to achieving this goal is the pricing of wastewater services.

“This will take time, of course, and the involvement of wastewater utilities in identifying downstream potential economic uses for polished tertiary treated effluent.”

TANQIA has been working on a solution that entails containerised polishing of tertiary treated effluent. The results, said Elwan, are encouraging. “TANQIA is now moving to the final stage of the technology by using solar energy as a source of power for the polishing process,” he says. “TANQIA is looking at introducing containers with solar panels, with a view to reducing the cost of polishing wastewater and the cost of desalination. This will require at least another two years of data collection, examining the quality of the output and the energy use per gallon of water to determine the commercial potential of the process.”

TANQIA is working closely on this solution with Water4All – a water treatment unit supplier from the Netherlands – as it strives to commercialise small-scale units for small suppliers and individual consumers. Such a decentralised, self-sustainable solution clearly presents enormous opportunities for driving down the cost of wastewater treatment. It is just the latest in a long line of innovations that positions TANQIA at the forefront of its sector, and serves to further validate this progressive firm’s award-winning, technology-driven approach to wastewater management.


Ahmed Attiga: The Enviable CV and Impressive Performance of APICORP Chief

Ahmed Attiga is CEO of a multilateral financial institution established in 1974 by the 10 Arab oil-producing countries.

[caption id="attachment_19894" align="aligncenter" width="900"] CEO: Dr Ahmed Attiga[/caption]

The goal of the Arab Petroleum Investments Corporation was to finance and support energy and petroleum industries in the region, and in emerging markets.

Attiga was unanimously selected for his first term as chief executive by APICORP’s member states in September 2017. The post comes with responsibility: APICORP is the only Arab financial institution enjoying two AA credit ratings from Fitch and Moody’s in the MENA region.

Attiga has proven more than up to the task. He has a distinguished career spanning more than 25 years in investment management, development finance, private equity, research and teaching.

Before Joining APICORP, he was the regional director at the International Finance Corporation, the private sector arm of the World Bank Group. He was responsible for investment and advisory services activities in the Middle East, overseeing an investment portfolio of over $2.7bn and an advisory programme of some $200m.

Attiga also served as a senior advisor on the Board of Executive Directors of the World Bank Group in Washington, DC.

Prior to his service at the World Bank Group, Attiga managed a private equity fund for the State of Wisconsin in the US. He also advised Saudi Arabia’s Public Investment Fund (PIF) on privatisation and restructuring strategies.

In his early career, Attiga held teaching and research positions at the University of Wisconsin-Madison and at the Kuwait Institute for Scientific Research (KISR).

Doctor Attiga is currently a board member at the Industrialisation & Energy Services Company (TAQA) in Saudi Arabia, and at the Alkhorayef Petroleum Company in Kuwait. He is also a trustee of the Oxford Institute for Energy Studies at the University of Oxford, and a member of the International Studies Dean’s Advisory Board at the University of Wisconsin-Madison.

In 2013, he was appointed by His Majesty King Abdullah II of Jordan to serve on the Royal International Commission to evaluate Jordan’s Privatisation Programme. From 2016-2020, he served as a board member of Emirates Development Bank in the UAE.

Attiga has also served on boards, task forces and committees at national, regional and international level. The Libyan national was selected in 2019 and 2020 to be among the Power 50 CEOs in oil and gas in the MENA region by OilandGas.com.

He has also received Princeton University Leadership award (2003) and KISR’s National Academic Achievement award (1988).

Attiga received three graduate degrees: Ph.D. in Finance; MBA, and M.S in International Economies, all from the University of Wisconsin-Madison. He earned his Bachelor in Economics, Summa Cum laude, from Kuwait University.


The Arab Petroleum Investments Corporation (APICORP): At the Heart of the Arab Oil-Producing World

The Arab Petroleum Investments Corporation (APICORP) is a multilateral development financial institution whose shareholders are the 10 Arab oil exporting countries.

APICORP is energy-focused, with a mandate to support the sustainable development of the industry in member countries.

The institution’s initial goal, to be a trusted financial partner for the Arab energy sector, would seem to be successful; its balance sheet for 2020 grew by 7.5 percent to reach $7.89bn.

But APICORP has more than goals; it also has a mission: to develop the sector through creative, value-adding solutions, provided on a commercial basis to facilitate value maximisation.

[gallery link="file" size="medium" ids="19966,19964,19963,19962,19961,19960"]

Its offering includes equity investment, debt financing, financial advisory and energy research services. APICORP’s 2020-2024 strategy is its roadmap to the future, with an aim to bolster its position via a sustainable and innovation-driven approach.

The strategy has five strategic priorities:

To thrive as a multilateral development financial institution in the transitioning energy world

To lead the financing of energy players

To diversify and deepen its client base

To shape the energy landscape in the Arab world

To build agile and efficient external and internal ecosystems.

Designed with an in-built capacity to evolve, the strategy will be constantly reviewed to ensure that the organisation remains in lockstep with market needs, and maximise its potential to be a catalyst for impact and sustainability in the region’s relevant sectors.

APICORP’s lines of business include:

Corporate Banking

An innovative array of funded and unfunded, conventional and Islamic, financing solutions to support the energy industry in the MENA region and beyond. It serves as a catalyst for trade growth across the region with international partners.

Investments

APICORP’s own capital is invested to acquire direct equity stakes along with its strategic partners in greenfield and brownfield projects, with strong management teams and solid growth potential in diversified energy sub-sectors across multiple geographies.

Strategy, Energy Economics, and Sustainability

It provides analysis, insights and advisory services on the regional and global energy sectors to internal and external stakeholders, as well as guidance to strategic partners. This positions APICORP as a world-class thought-leader on energy investment, finance and sustainability. It leads APICORP’s corporate strategy design and implementation.

Portfolio Management

This oversees APICORP’s portfolio, cutting across investments and corporate banking with a dynamic, hands-on approach in managing loans and investment portfolios post-disbursement, while driving exit strategies and optimising portfolio performance.

Treasury & Capital Markets

APICORP’s liquidity is proactively managed, with a diversified fixed-income portfolio and a robust funding profile in order to ensure the corporation’s growth, resilience, and sustainability.

APICORP's diverse financing and equity portfolio spans sectors and geographies to provide it with flexibility and advantage to maximise value for member countries while serving the broader energy spectrum.

APICORP’s track record illustrates its ability to identify and access opportunities. With a strategic network of partners and relationships, the Arab Petroleum Investments Corporation has the insight and risk mitigation expertise to safely and successfully pursue energy development in the MENA region.

While APICORP's member countries and the wider MENA region remain the primary focus, the corporation is expanding geographically to support the development of regional energy. It is growing operations into key markets in Europe, Asia and North America and creating value for its regional partners by supporting their own international expansion plans. Investing in global firms offers strong potential for technological transfer back to the region.

APICORP has shareholders in Saudi Arabia, Kuwait, UAE, Libya, Iraq, Qatar, Algeria, Bahrain, Egypt and Syria.

Financial Results

The corporation posted a three percent year-on-year (y-o-y) rise in net income, despite the fallout from the pandemic – from $112m in 2019 to $115m in 2020.

The key drivers include six percent y-o-y growth in APICORP’s corporate banking portfolio, to reach $3.9bn, as well as 13 percent y-o-y growth in the treasury and capital markets portfolio: $46m in capital gains, a 488 percent increase.

The balance sheet increased from $7.34bn to $7.89bn in 2020, a 7.5 percent y-o-y uptick, higher than the five percent CAGR recorded over the previous five years. Key financial and risk metrics also continued steady improvement, and the corporation recorded its highest-ever liquidity ratio of 349 percent, and increased its capital adequacy ratio to 31 percent (+one percent y-o-y), as well as reducing its leverage level from 2.5x in June 2020 to 2.23x in December 2020.

The robust financial and risk metrics enabled APICORP to retain its Aa2 rating, with a stable outlook from Moody’s. The corporation earned its inaugural AA rating, with a stable outlook, from Fitch. APICORP is the only regional financial institution in MENA to hold two AA ratings.

The year also witnessed a landmark: the corporation increased its authorised capital from $2.4bn to $20bn, subscribed capital from $2bn to $10bn, paid-up capital from $1bn to $1.5bn, and callable capital from $1bn to $8.5bn.

Business Line Highlights

Corporate Banking
APICORP increased its corporate banking assets by six percent y-o-y in 2020 to reach $3.9bn, booking $1.6bn in drawdowns over the year. Six of the 11 project finance commitments in 2020 were in green energy or within the category of sustainable utility projects, and all were part of the $500m counter-cyclical package the corporation launched in April to help the MENA energy sector mitigate the impact of the pandemic and oil price volatility. The gross NPL ratio, meanwhile, remained low, at just 0.59 percent.

Investments
Although the 2020 crisis affected the revenues of some investee companies, it also opened opportunities for APICORP to pursue quality investments in high-potential, well-run companies and like-minded investors seeking to maximise long-term value-creation and impact. The corporation made its first equity stake in a wind energy company, while progressing on a number of exits from current investments to optimise the balance sheet as well as capitalise on the positive long-term growth prospects of its equity portfolio.

Treasury & Capital Markets
By following a more proactive approach to managing the assets and liabilities of APICORP, Treasury and Capital Markets was able to optimise the risk-adjusted returns the liquid portfolio (including $ 46m in capital gains), and bolster its strong funding profile.

On the funding front, the Arab Petroleum Investments Corporation increased its medium-term financing by 26 percent y-o-y while decreasing short-term financing by 12 percent as a safeguard against prolonged market volatility. The year saw the corporation raising its profile as a debt issuer in the sovereign, supranational and agency (SSA) space through the $750m benchmark bond issuance in June, which achieved the lowest-ever yield and spread in the corporation’s history, and attracted high-quality SSA investors from across the globe. More than 50 percent of the order book came from central banks and official institutions. The success of the transaction was further cemented with the $250m tap in October that brought the total issuance to $1bn.

Financials for the year ended December 31, 2020:

Net income increased to $115m

Balance sheet grew by 7.5 percent to $7.89bn

Corporate Banking and Treasury & Capital Markets portfolios up six percent and 13 percent, respectively

Improvement in key financial and risk metrics, including highest-ever liquidity ratio (349 percent) and capital adequacy (31 percent).


Whitecroft Capital: Banks, Buffers, and One Strategy’s Vital Role in Bolstering Battered Economies

Bank risk sharing – what is it? When asked to write a few words about Whitecroft Capital and our investment strategy, I suddenly realised what a challenge it may be to explain this succinctly. For more than 15 years, we have been living in this small world consisting of specialist investors and large financial institutions, working on multibillion transactions and allocating capital to the world economy. Sounds exciting, right? For many not so much; perhaps even a boring topic. When asked what I do for a living, a specific caricature always comes to mind where the wife is saying to her husband: “Dear, it is getting late and the guests aren’t going home. Could you please start talking about credit derivatives?” However, I hope you will not “leave” like the guests while I introduce you to our strategy; you are very welcome to stay.

We founded Whitecroft Capital in 2016 with a clear objective - to focus on one narrow, unique, but successful risk sharing strategy. We planned to further popularise it among institutional investors such as pension funds, insurance companies and foundations looking to diversify from mainstream strategies.

Risk sharing can be traced back to the implementation of the Basel capital accord. In 1988, following lengthy deliberations among the world’s central banks, a new regulatory pact was born. It set the globally uniform, minimum regulatory capital requirements for all banks.

What is regulatory capital? Major commercial and universal banks provide commercial loans, working capital lines and trade finance advances as a standard part of their service relationship with the customer. This comprises the core business of the bank, and what customers have come to expect. Each credit exposure that the bank acquires through lending must be supported by regulatory capital. This is to create a buffer to absorb credit losses should a client be unable to pay back the loan.

The underlying idea is simple, but the amount of such regulatory capital is far from trivial. After the taxpayer-funded bailouts of the banking system in the 2008 global financial crisis, supervisors were tasked with making the financial system more resilient. They came up with a new framework, known as Basel III. It required all banks to hold significantly increased amounts of regulatory capital to support the whole range of their exposures. Capital has become a scarce resource which could limit further lending growth. Banks are now motivated to find ways to manage their capital more efficiently. Risk-sharing transactions provide an important solution.

[caption id="attachment_19915" align="aligncenter" width="651"] Number of completed transactions in a calendar year. Source: Whitecroft Capital Mamagement[/caption]

It is a partnership in which banks share the credit risk of their loan portfolios and, consequently, free-up some capital. This is released through risk sharing, then recycled into the lending business providing room for further growth. Monetary and political authorities, particularly those in Europe and the US, have long realised the increasingly crucial role of risk sharing for banks. Banks now have the means to actively manage their balance sheet capital requirements and increase their lending activities, in particular to the SME sector. This endorsement of risk sharing by the authorities is encouraging its use as a strategic tool.

What does risk sharing provide to investors? They can use it as a route to begin directly investing in a specific business of the bank and participate in its growth and performance. The best part being that the investors don’t need to build the same complex and expensive infrastructure as the banks. All loan portfolios used in risk sharing are performing, good quality with an average rating equivalent of BBB/BB, and comprised of hundreds of private loans on the banks’ balance sheets. The banks then offer these credit exposures for regulatory reasons – to improve their capital position – rather than for risk management purposes. These loans are not easy to come by, as they are not available to institutional investors outside of the risk-sharing structures.

In recent years, direct lending strategies have become popular as a way to intermediate banks and lend directly to companies. The goal of the risk sharing strategy is quite the opposite: to provide capital to banks so that they can grow their market share and leverage their existing lending platform. Risk sharing investors do not compete with direct lenders; they largely complement one another by providing finance to the full spectrum of borrowers.

The risk-sharing market has been around for over 20 years. The issuance has been growing steadily since 2008. We estimate the market size to be around $30-35bn of issuance, supporting up to $500bn of lending. Most global banks in Europe and North America are now active in the sector.

Banks are a vital part of the solution to revive world economies, battered by the pandemic and ensuing lockdowns. Capital buffers have been dented by the conservative provisions made at the start of 2020. Capital is key to credit flow, and there is a significant impetus on increased issuance as a means for banks to manage these pressures. And 2020 turned out to be one of the most active on record.

The investor base in the risk sharing sector has been steadily growing, mostly due to increased awareness and steady performance even in times of stress. Whitecroft has been striving to ensure more investors are able to allocate to risk sharing. Our investment team, with product expertise in the sector, has over 70 years of industry experience and more than eight years of investments in the asset class. The team has executed more than 50 transactions in this space over the past decade.

Access to risk-sharing partnerships is still limited because the transactions are structurally complex, large in size, and typically, privately offered to only a handful of buyers. Specialist managers such as Whitecroft Capital can access exclusive opportunities with the global banks. Our relationships with these institutions, which have strengthened over the years, encourage banks to turn to us when they are looking to undertake such transactions.

Our flagship product, WHITECROFT Core Bank Risk Sharing fund, is a combination of 18 core businesses of 10 leading international banks with strong underwriting and credit controls. The overall portfolio is very granular, referencing 13,500+ borrower groups, with maximum average borrower concentration of only 0.15 percent. It is well balanced and diversified, with exposure to obligors in 77 countries and 37 industry sectors.

While some private strategies are being flooded with capital eroding value, risk sharing is not. It remains a hidden gem, offering steady and consistent returns of L+ 8-10 percent. Risk sharing has outperformed leveraged loans and high yield bond indices before and during the pandemic. Especially stark is the extent of outperformance of the strategy against the bank equity index. It all goes to show the relative value of risk sharing for specific portfolios compared to generic investment into bank stocks.

No doubt last year was very difficult for everyone. Fortunately, the vaccination programmes seem to be effective in containing the pandemic. We expect a sharp economic rebound, cementing the solid performance of risk sharing through this crisis. With strong regulatory support, banks will increasingly set up such programmes providing even further diversification to investors looking for stable and uncorrelated strategies. We are confident that risk sharing will continue to have a positive and successful future, and look forward to the busy year ahead.

[caption id="attachment_20205" align="alignright" width="300"] Portfolio Manager & Partner:
Michael Sandigursky, CFA[/caption]

Michael has more than 25 years’ experience in the financial services industry. Prior to founding Whitecroft Capital in 2016, he was a portfolio manager running a risk sharing strategy at BlueCrest. Michael positioned BlueCrest as a market leader in risk sharing, building up an investment portfolio of over $800m. The strategy invested across more than 30 risk sharing transactions and has had a successful track record since 2006. Prior to BlueCrest he had a career at Citi working in corporate bank, trade finance and structured credit. He holds an MBA from the London Business School and is a Chartered Financial Analyst.


Balsam Al-Ayoub: Cut and Thrust for Multi-talented Philanthropist

[caption id="attachment_20197" align="alignright" width="300"] Balsam Al-Ayoub: Kuwait Olympian and international fencing champion. Photo credit: redbull.com[/caption]

Balsam Al-Ayoub has been fighting for Kuwait — and gender equality — since she was a child.

Al-Ayoub’s parents encouraged her and her sister, Lulwa, to get involved in sports at an early age. The sisters gravitated towards fencing, even though there was little opportunity for girls in the Gulf region. At the time, there was only one general sports club for females, but the outlook has improved.

Al-Ayoub — who defines fencing as a “noble, elite and classy” sport — says the discipline chose her at age 16. “I had to prove that I can practise a sport which had been exclusive for men in Kuwait for years. To be a fencer means you have to be a fighter, a warrior, a dreamer, an achiever, a believer, a supporter and a champion. It’s not only about the support you get from those who believe in you, but also the greatness of being a role model, or an influencer, in your society. I take a lot of pride watching my positive influence transferred to the young generation,” she told The Talk magazine.

She finally gained admission as a professional athlete in the Kuwait Sports Club. The government-sponsored organisation abandoned its gender exclusion — and she and her sister went on to win several international competitions. “I am a professional athlete representing Kuwait around the world,” said Al-Ayoub, “and I am also a mother.” She enjoys the reactions this statement provokes.

Al-Ayoub spoke with Gulf News in 2010, around the time she left the state-sponsored club to secure private-sector endorsements. She competed across Europe, Asia and the MENA region, averaging 10 to 12 events annually over a five-year stretch.

Both sisters are considered role models for their athletic accomplishments — silver for Balsam in the Asian Games and bronze for Lulwa in the World Cup — as well as their social activism. “We respect traditions and don't break the frame despite stretching it at times. And for the past 15 years we have managed to make our voices heard through sport.”

Al-Ayoub introduced self-defence as part of her sports, cultural and developmental programme, Be Strong, to support the UN’s global campaign to end violence against women and girls. Thousands have participated in the course. Her other pilot programme, A Champion Among Us, began as a platform to advocate for equal sporting rights for girls and has evolved into co-ed programme teaching children to use sports as a tool for personal and societal development.
“We are using sport as a medium for change on the perception of women by society at large, and I must say we have been successful to a large extent,” said Al-Ayoub. “We are just trying to do what we can in our own small way. There is no traditional law or religion that can bar or prohibit women from taking their place in society.”

Athletic apparel, on the other hand, can be a barrier for sportswomen in more conservative cultures. Al-Ayoub struggled to find outfits that would be considered suitably modest, and finally decided to make her own. Her mother, Fatima Al Omani, was a seamstress who taught her to convert fabric into fashion; now 90 percent of her wardrobe comes from her own hands.

“I designed the entire range of costumes for a fencing competition that I organised for women,” said the woman who was named by Harper’s Bazaar as Kuwait’s Best Dressed Woman in 2017.
After retiring from professional sports, Al-Ayoub launched her fashion label, Balsam Studio, and has gained a following eager to see each new season’s collection. Unlike most designers, Al-Ayoub’s work is generally related to a social cause. Profits from her premier collection, titled Sewing the Wounds, supported the anti-violence work done by the non-profit Abolish 153.

“I introduced my brand to the women community in Kuwait by connecting it to a cause that affects women in a very personal way.”

Al-Ayoub took part in a documentary-making course, which coincided with a philanthropic tour to teach football and badminton to children across Africa. She was featured in a documentary series (Her Story) about the trials and triumphs of female athletes.

Balsam and Lulwa Al-Ayoub were recognised for their outstanding social entrepreneurism by the Ashoka Fellowship in 2009.


Lord Waverley: Quest for Balance and Unity Hampered by Blurred Lines and Differing Standards

There is an increasing recognition of the need to reassess the intersection of global co-operation and security, and how Western democracies can best balance those needs and interests.

Global politics is a grey area with individuals, state- and non-state actors blurring the lines between internationally acceptable norms of behaviour and internationally questionable actions. The balance required for peace and prosperity is difficult to find, but proponents of global co-operation and security offer astute evaluations of threats and opportunities.

The need for effective global co-operation was accentuated by the pandemic. As global crisis tightened, the World Health Organisation led the response. Millions of lives were saved through the exchange of information, expertise and resources — but with such co-operation came a security consideration that is now becoming a pressing concern.

Peace, prosperity, and — as the last 18 months demonstrate — humanitarian necessity require a level of co-operation that can at times create national or regional vulnerability. Trust can be misplaced in potentially malicious actors. There are challenges to the maintenance of high moral standards when engaging internationally. The importance of global trade, military, and intelligence channels can sometimes be at odds with international norms, expectations, treaties, and rules. For the leaders of the world’s democracies, striking the balance between pragmatic co-operation and astute security considerations can be a challenge.

The UK’s trade relationships reflect this, as we engage with states that restrict human rights, freedom of information, and free speech. While important for UK industry, trade reflects a necessity to work with countries that are being governed outside of international norms. This is particularly evident in the western reliance on energy imports.

"China poses a significant threat to global norms and the maintenance of an international rules-based system."

This dependency can cause human rights to be ignored, empowering disruptive states. Achieving global prosperity has become increasingly difficult for Western democracies. This has prompted a NATO Advanced Presence in the Baltic states, and deployment of its Very High Readiness Joint Task Force. Communications with the North Atlantic Council have been suspended and NATO’s London Declaration of 2019 identified specific threats to Euro-Atlantic security. Additional threats to election integrity, cybersecurity and personal safety have led to Russia being outcast and sanctioned by the Western political community.

With bilateral relations deadlocked, effective co-operation with Russia has become almost impossible, detrimentally impacting trade, research, military and intelligence efforts. Identification of Russia as a threat has increased Putin’s sense of exclusion and encourages Russian interference in other regions. In this light, Russia’s intervention in Syria can be viewed as status-seeking, as it seeks to establish a sphere of influence in the Middle East to challenge Western action in the region. There will be no solution to the Syrian civil war without Russia’s input, and the West must recognise the driving force of Putin’s foreign policy.

How effective are deadlocked bilateral relations and heavy economic sanctions on the long-term strategic interests of the West? While claiming to remain open for dialogue and a constructive relationship, Western leaders tend to alienate Russia with their disciplinary tone. If global co-operation requires a pragmatic approach, then diplomatic relations require better-chosen language and a focus on mutual interests. Commentators argue that Russia is craving US recognition of its rise in geopolitical status, and the Biden-Putin summit in June serves this end. Joe Biden’s approach reflects a broader consensus, expressed in the UN Security Council Meeting, where the EU High Representative called for global co-operation based on agreed rules — “rules-based multilateralism”.

Rules-based multilateralism is not new, but the recent emphasis on this approach can pressurise countries that wish to participate in UN discussions, negotiations, and agreements into conforming with international rules. China has identified the EU as a model for multilateralism that should lead on “renouncing double standards and working towards shared goals”; the UK promotes an international rules-based system with the UN at its centre.

But the comments from the Russian representative reflect a persisting issue with the European Union. The Russians accuse the bloc of “arbitrary coercive measures” that go beyond council mandates. Can rules-based multilateralism combat such sentiments? And how can both sides be sure of its capacity to ensure their respective security?

China poses a significant threat to global norms and the maintenance of an international rules-based system. There are rising concerns among Western leaders about President Xi’s tenure as the 2021 G7 joint-communiqué reflects this. And yet, the G7 joint-communiqué reflected compromise between cooperating with the Chinese in areas of mutual interest and calling on China to respect human rights. Anxieties around confronting President Xi Jinping demonstrate the importance of diplomatic relations in the quest for peace, prosperity and international security.

This reflects tensions surrounding global co-operation and security that are difficult to balance. The need for continued co-operation with a state that challenges everything the West claims to stand for is indicative of its global eminence, and the value it holds when bargaining with multilateral blocs such as the UN and the EU.

About the Author

Lord (JD) Waverley
Independent Member
House of Lords

Twitter: @LordWaverley

LinkedIn: linkedin.com/in/jdwaverley


Dame Jessica Ennis-Hill: ‘Cheap Childcare’ Led to Winning Athletics Career, Jokes Ennis-Hill

[caption id="attachment_20221" align="alignright" width="300"] Dame Jessica Ennis Hill: British Track and field athlete[/caption]

Britain’s most celebrated track and field athlete, Jessica Ennis-Hill, announced her retirement from professional sports at the end of 2016.

She left sport as a three-time heptathlon World Champion, 2012 Olympic champion and 2016 silver medallist. But the horizon holds plenty of fresh opportunities for her.

Ennis-Hill is now putting her energy towards her passion project, Jennis, an app offering smart training programmes to optimise hormonal health and fitness.

“Entrepreneurship is a completely different world for me, and it’s been really nice to delve into something which is unfamiliar in some ways, but familiar in others,” she said.

“The learnings I had as an athlete about communication and motivation — and even how we worked with companies and brands — really have helped me in this new journey. In the same way that I had that close team around me in sport, I have a team around me at Jennis.

“They know what I want to achieve, and we work as a collective to get there, keeping each other focused and on track. So, I take all those learnings and all those experiences from the elite world of athletics, and I’m trying to apply them to this new world of business, which is exciting.”

Founded in 2019, Jennis aims to close the data gap that exists around women’s health, citing that only four percent of medical studies are done exclusively on women. Most programmes are created for the physiology of men, and a 24-hour cycle.

Although Jennis is designed with women at the centre, the training programmes are organised by beginner, intermediate and advanced levels — and are apt for all genders and fitness levels. Women, however, benefit from additional features to help them tailor fitness routines around special circumstances, like menstrual cycles, pregnancy and post-natal limitations.

With an expert team backing her, Ennis-Hill managed to bring her post-natal body back to championship form in record time. While Jennis doesn’t shoot for the same gruelling workouts required for professional athletes, she hopes the app will give other women the same level of understanding and confidence that she had after her first child.

Coach Toni Minichiello recognised her raw talent when she attended an athletics camp at age 13. He stayed with her throughout her 17-year career.

As an Olympic athlete, Ennis-Hill benefitted from the best physiotherapists, physiologists and psychologists in the world. She also studied psychology at the University of Sheffield, examining common precursors to peak performance — regardless of the field. She says it has lots to do with mental resilience and consistency.

She jokes that her mum, Alison Powell, referred to the camp that launched her championship career as “basically cheap childcare”. Powell had a busy schedule as a nurse and later as a substance abuse counsellor, so her daughters spent the summer holidays at the local Sheffield track.

“It was two weeks of athletics — and a way to keep me and my sister entertained,” Ennis-Hill shared. “I had no idea that I would love it as much as I did.”

Ennis-Hill credits her mother as the wind beneath her wings, always encouraging but never pushing, giving great advice and being there when needed. “Without my mum introducing me to athletics at that age, and supporting me the way she did, I would never have continued with it. Without her, I would never have carved out the life that I have for myself now.”

Ennis-Hill was honoured as a Dame for her services to athletics. That’s a lofty title for such a grounded person, and she seems almost embarrassed when it’s mentioned.

“Having great people around me allowed me to keep perspective of what was important so that I wouldn’t get distracted by the bright lights of money or success and would focus on the basics of doing what I needed to do.”


Interview with Grete Faremo, Executive Director of UNOPS: Inclusive Infrastructure Development

[caption id="attachment_20259" align="alignright" width="300"] Executive Director of UNOPS: Grete Faremo[/caption]

In pre-pandemic Oct 2019 (about 20 months ago) you wrote an article for CFI.co magazine that highlighted the importance of infrastructure for communities, sustainable development and across the SDGs. If so, how have the world and your conclusions changed?

While the world has changed a lot since my 2019 article for CFI.co, much of what I argued remains relevant and important today. In 2019, UNOPS had recently produced a report with the University of Oxford which found that 92% of all the SDGs are influenced by infrastructure. This remains true. And very soon we will be publishing new research together with Oxford and UNEP which will highlight infrastructure’s contribution to greenhouse gas emissions and recommend ways we can address this. What both these reports illustrate is that sustainable infrastructure is absolutely critical in tackling climate change and achieving the SDGs.

The COVID-19 pandemic has highlighted how crucial infrastructure is to the smooth functioning of our societies. It revealed how unequipped our world’s infrastructure is to deal with a shock of this magnitude. As countries look to the future, infrastructure needs to be at the heart of a sustainable, resilient and inclusive recovery

It is true that we have a new set of issues to deal with and problems to solve, but the solutions can still be found in how we approach sustainability and development.

What major developments would you point to (pick your own time horizon)?

As a global community, our most immediate concern is tackling the pandemic. Ensuring that everyone, no matter where they are in the world, has the opportunity to be vaccinated and protect themselves against COVID-19.

We must also look towards our recovery, but in the context of achieving the 2030 Agenda. Before the pandemic, it was calculated that between $3 trillion and $5 trillion would be needed every year to meet the SDGs by 2030. Estimates vary widely, but most put the annual funding shortfall among developing economies in the region of $1 trillion and $2.5 trillion. Undoubtedly, the investment needed will now be greater than ever before.

COP26 in Glasgow later this year will be an opportunity for nations to come together and draw up new proposals committing themselves to a greener future. UNOPS stands ready to help any government achieve these aims.

How have your private sector and political experience equipped you for serving in your position at UNOPS?

Many of our leaders in UNOPS, including myself, have had experience in both the public and private sector, and we use that experience to guide the organization into the position as the best of both of those worlds.

It is true that UNOPS is run more like a private sector business than other UN agencies, but we also combine that with our responsibilities as a key member of the United Nations family. This requires careful consideration at every stage.

How is UNOPS supporting infrastructure development (including a case study example)?

UNOPS are the United Nations infrastructure and procurement specialists. We have a mandate for infrastructure, given to us by member states. It is our responsibility to provide support to infrastructure projects across peace and security, humanitarian, and development efforts.

We do this by supporting governments, the United Nations, and other partners in achieving the SDGs, and local objectives for people and countries. This is done through our project services in infrastructure, procurement and project management for a more sustainable world.

One of our most important projects we are currently working on is in Yemen. Today, only 10% of Yemen's population are connected to the public electricity grid. UNOPS has partnered with the World Bank in two projects worth $200 million to restore access to critical services across Yemen in local communities to millions of Yemeinis.

In cities across Yemen, UNOPS is providing solar power solutions to health facilities and schools, rehabilitating 400 kilometres of roads, improving water and waste management services and creating 1.5 million days of temporary employment.

UNOPS is also currently working to restore electricity supply to 200,000 households, 220 health facilities and 280 schools in rural and peri-urban areas.

How does UNOPS fund projects? And how is UNOPS funded?

UNOPS does not fund projects. We implement projects on behalf of our partners, helping them to advance the 2030 Agenda and support the achievement of the Sustainable Development Goals.

UNOPS is a not-for-profit UN agency focused on implementation, we do not receive core funding from Member States. Therefore, UNOPS does not fund projects, we implement projects on behalf of our partners for a fee, which covers our costs.

Is gender equality improving – or the contrary (examples of both)?

In 2018, 38% of our workforce were women. I was proud to announce on International Women’s Day this year that we had reached gender parity. Today, women represent over 49% of our workforce.

But there is still work to do. We want to increase the number of women in senior positions. We are making good progress towards this with just over 43% in senior positions today, and we aim to increase this figure.

But inclusiveness goes beyond gender. We are looking to widen our approach, and strive to ensure a broader, more diverse, and more inclusive model, including issues like disability, ethnicity and race, economic status, LGBTQI+ identities and youth.

Is energy infrastructure the most critical for development?

The world has experienced rapid urbanization and population growth, especially in emerging and developing economies. This has led to an increased demand for energy. Reports show that by 2040, these developing economies will consume 65 per cent of the world’s energy.

That is why investments in sustainable, clean energy are so crucial. We must do all we can to support developing economies to make investments in affordable renewable energy. This will help them reduce their emissions and make progress towards the SDGs, while at the same time giving them the energy they need to continue to grow.

Is there a trade-off between the cost effectiveness of green energy vs. cheaper sources to the detriment of either climate impact or economic development?

Society’s concept of what the trade off is, is changing. Failing to act and adapt our energy needs will result in potentially catastrophic circumstances for many living across the world. Not addressing this is simply not an option.

This is not just something society should worry about, but businesses too. Last year, a report argued that more than half of global output depends on high-functioning biodiversity. We risk destroying this biodiversity without switching to cleaner “green” energy sources. And that means risking thousands of livelihoods at the same time.

Do we want a world we can all live together or a world that is uninhabitable for many? That is the true trade off.

About Grete Faremo

Grete Faremo is the United Nations Under Secretary-General and Executive Director of UNOPS. Ms Faremo took charge in 2014 having previously led four ministries in the Norwegian government as well as a number of leadership positions in the private sector.

She now leads the organization at a crucial time through the COVID-19 pandemic as UNOPS continues to work closely with partners around the world, delivering more than $2.2 billion worth of services in the last year alone.

IFC’s Blended Finance Unit blends funds from donor partners alongside IFC’s own in order to catalyze investments that would not otherwise happen because of market barriers. These funds can be used to undertake high-risk, high-reward projects that have strong potential to improve lives and reduce poverty. From fiscal year 2010 to 2020, IFC has deployed $1.6 billion of concessional donor funds to support 266 high-impact projects in over 50 countries, leveraging $5.8 billion in IFC financing and more than $6.8 billion from third parties.

About UNOPS

UNOPS’ mission is to help our partners build the future by providing infrastructure, procurement and project management services for a sustainable world.


Piotr Zawistowski, TGE - 20 Years of Safe Trading: Trading – Guaranteeing – Educating

Creating an exchange-traded energy market in Poland was not a trivial task but Towarowa Giełda Energii (TGE) has been successful, which is demonstrated, among other things, by the fact that today market prices are set in a transparent manner. The recipe for the future is called expansion – to new business areas, new markets and new services. In the course of 20 years of its activity, TGE has grown into a leader effectively implementing innovative solutions in the field of trading energy products and guaranteeing the security of transactions. And it keeps up the momentum.

There are at least several roles that are fulfilled by the Exchange. It is the market integrator, source of reference prices, guarantor of safe trading and information centre, as it provides its members and stakeholders with access to reliable, up-to-date exchange market data. Over the two decades, TGE has become an important institution for the Polish economy. Not alone, as the TGE Group also includes the Warsaw Commodity Clearing House and InfoEngine.

The growth of TGE has always been and continues to go hand in hand with the development of the market. The changes introduced, particularly in the products we offer, have been driven by emerging market opportunities. As you may remember, the TGE’s operational activity started in 2000 with the spot electricity market. For many years, the exchange focused on day-ahead trading. It was only after a few years that we launched the forwards market where transactions are concluded over longer time horizons. For gas, it was the same story. First the spot market, then the forwards market. Today, TGE is a vital instrument that supports the transformation by offering secure and transparent tools and services – says Piotr Zawistowski, President of the Management Board of TGE.

T - TRADING

From the very beginning, TGE has raised the bar by launching new markets, introducing new instruments and adapting to global standards. There is no denying that it was actively shaping the commodity market reality. And worked consistently to strengthen its position as the leading exchange not only in Central and Eastern Europe, but also on the entire continent. And all this thanks to the offering which makes TGE stand out from other exchanges because of its comprehensiveness and wide range of products and services available in one place. It currently consists of:

Exchange Commodity Market where parties can trade on the spot market for electricity, natural gas and property rights;

Organised Trading Facility (OTF) which enables transactions on forwards markets with physical delivery for electricity, natural gas and property rights (financial instruments);

Financial Instruments Market where CO₂ emission allowances are traded;

Certificate of Origin Register and the Guarantee of Origin Register which are operated as support systems for generators of electricity from RES and co-generation units;

Agricultural Exchange Market – started in March 2020, a platform where wheat, rye and maize are corn.

The creation of the Polish exchange market environment and the adaptation of the offering to market needs naturally go hand in hand with TGE's activity in regional and international organisations such as: Europex, APEx, AFM or the Polish-Lithuanian Chamber of Commerce.

G – GUARANTEEING

In 2003 TGE was the first, and so far the only, entity in Poland to have obtained a licence from the Polish Financial Supervision Authority (PFSA) to operate a commodity exchange and a regulated market. The ongoing supervision by the PFSA confirms a superior level of trading security and high standards in mitigating the risk of undesirable impacts of market participants, in particular abuse and manipulation.

But that is not all. Apart from making impact on the Polish market reality, TGE is also active on the international arena, which provides an additional guarantee of high quality of service. The Exchange is proud to have the status the Nominated Electricity Market Operator (NEMO) for the Polish pricing area. It plays an active role in the Single Day-Ahead Coupling (SDAC) according to the PCR model, and in the Single Intraday Coupling (SIDC/XBID) in Europe. Moreover, TGE is included in the ACER's list of platforms for reporting transaction information according to REMIT requirements All the above initiatives are aimed at creating a common electricity market in Europe, which is an additional confirmation for the Exchange members that TGE, while pursuing its own growth, also contributes to the development, knowledge and security of transactions for all its participants.

The integration is taking place primarily in the electricity market with broad access to electricity being its principal outcome. The fact that electricity from areas where it is cheaper flows to where it is more expensive has already become an obvious thing. Access to transparent transactions is very often mentioned as a benefit as lower prices improve competitiveness, which for businesses means equal conditions for purchasing electricity and gas and significantly improved competitiveness of their products versus neighbouring countries. This is part of the game of economics. Today, any participant in the wholesale market in Poland can very easily buy available power, at a price they find attractive, virtually anywhere in Europe – continues Piotr Zawistowski.

E – EDUCATING

Continuous dialogue with market participants is one of the TGE’s priorities. The initiatives undertaken are aimed at developing and promoting transparent trading in energy products, but also at raising awareness of the benefits of trading on the exchange. All activities the Company engages in are addressed to both market participants and the media or members of the Exchange.

In 2020, the Market Council was established as an advisory body for the Management Board of TGE concerned with the development of the product offering and working out the best solutions for entities operating on the exchange market. TGE Update is another initiative which consists in regular meetings of Exchange members where participants have the opportunity to learn about most relevant industry issues. Towarowa Giełda Energii has been also active in the field of education, initiating its own projects (e.g. the "Platinum Megawatts" Competition for the media, promoting reliable journalism on the energy sector) and getting involved in third-party projects. The participation in conferences and workshops is an opportunity for the Company’s representatives to share their knowledge with others, but also to expand their own horizons, drawing on good practices.

TGE listens to and, at the same time, is shaping the market while providing security and sharing information. Trading, Guaranteeing, Educating. And that’s how it’s been for 20 years – concludes Piotr Zawistowski, President of the Management Board of TGE.

Piotr Zawistowski

[caption id="attachment_20251" align="alignright" width="229"] President of the Management Board, Towarowa Giełda Energii S.A.: Piotr Zawistowski[/caption]

Piotr Zawistowski has extensive experience and expertise in the energy sector at both national and European level. He is brings over 20 years of industry experience combined with first‑class leadership and communication skills and a long track-record of successful management. His areas of expertise focus on strategy and vision planning, global market identification and practical knowledge of energy and gas trading rules.

Piotr Zawistowski served in senior positions in key energy sector institutions in Poland, including as President of the Management Board of the Association for Energy Trading, member of the Management Board of the Polish Electricity Committee and member of the Supervisory Board of TGE. Since January 2020, he is the member of the Board of the European Association of Energy Exchanges Europex.

He took up the position of President of the Management Board of Towarowa Giełda Energii in October 2017.