Annual Report 2017

ANNUAL REPORT 2017

STATE ELECTRIC COMPANY LIMITED TABLE OF CONTENTS

Executive Summary About us 1 Chairman’s Message 3 CEO’s Message 4 Board of Directors 5 Executive Management 7 How we grew 14 Who we serve 15 Statistical Highlights 16 Financial Highlights 17 Our Footprint 18 Market Review 19 Strategic Review 20 - Power Generation 20 - Distribution System 24 - Human Resources 25 - Corporate Social Responsibility 29 - Customer Services 30 - Financial Overview 32 - Creating efficiency and reducing cost 40 - Business Diversification 41 - Renewable Energy 44 Moving Forward 45 - Grid of the Future 46 - An Efficient Future 47 - Investing for the Future 47 Audited Financial Statements 2017 48 Company Contacts EXECUTIVE SUMMARY

The year 2017 is marked as a challenging yet Business was diversified into new areas such successful year in the recent history of State as water bottling and supply. Further STELCO Electric Company Limited (STELCO). The main showroom services were expanded to provide highlight of the year is that STELCO has more varieties of products. observed a net positive growth, after a few consecutive loss making years. Though STELCO has posted a positive growth, the increasing gearing ratio is an area of Some of the success stories in 2017 include the concern which needs to be addressed at the commencement of STELCO Fifth Power policy level with government authorities. Development Project as well as addition of generation capacity to the STELCO network. Based on current forecasts, the electricity Further upgrades on distribution network as demand doubles every five to ten years, hence well as adoption of new technologies to STELCO needs to generate a profit of over MVR improve service quality were implemented. 350million per year to maintain a healthy balance sheet. Significant measures have been Under the leadership of CEO Ahmed Zuhoor, taken to improve our income via efficiency drastic changes were brought to the functions initiatives, more effective billing and spending and operation of the management with policies. Despite this good trajectory, the high emphasis on efficiency and reliability of the gearing ratio of the company is an area of service to achieve the government’s pledge of concern. Due to our mandate, we are still taking 24/7 electricity. on more debt to expand our capacity. Hence regulatory help in terms of converting current Focus was given to improving human liabilities to share capital, a cost-reflective tariff, resources with greater emphasis on youth fuel sourcing flexibility as well as duty development. One of the key highlights was the exemption on fuel and lubricants are measures ongoing STELCO Hiyaa Project, which aims to that can be taken to make us achieve our target provide affordable housing for STELCO staff to become sustainable and independent. under the Governments Hiyaa Project.

ABOUT US

Who we are Our History

We are responsible for electricity generation, Our beginnings date back to 1949 when 14kW transmission & distribution and retailing of generator set was installed in Male’ to give electricity in Malé and in the islands we serve. electricity to some government institutions and public buildings. Our objectives are anchored on the expectations expressed in the national energy Though the service was provided under policy; the provision of reliable and sustainable different names through government entities, energy services for social and economic modern day STELCO was incorporated in 1997 development for all our customers. as State Electric Company Limited. His Strengthening power security and reliability, the Excellency Abdulla Yameen Abdul Gayoom provision of round the clock electricity to all, and was appointed as the Chairman of the the use of modern technology that is Company and was instrumental in laying the economically feasible and commercially viable foundations which led to the modernization and are embedded in our mission. growth that STELCO has achieved today.

STELCO’s First Anniversary 1998

Page 1 OUR MISSION OUR VISION

To provide electricity to enrich the To a c h i e v e t o t a l c u s t o m e r lives of the public every day in every satisfaction through management way and everywhere in a reliable, fast excellence and staff satisfaction. and honest manner.

Core Values

• Making it as easy as possible to contact our • Continuously enhancing and improving the technical support team 24 hours a day, 7 days a network to ensure that the service we provide week. continues to meet and exceed the expectation of our customers. • Providing clear, complete and accurate information on our products, services and • At all times striving to be honest, friendly and pricing. courteous, treating all customers as valued customers. • Ensuring that in every aspect of our work, each individual is responsible and accountable • Making certain that the level of service we for the quality of their work. provide meet your reasonable expectations.

• Treat personal information in the strictest confidence.

Page 2 CHAIRMAN’S MESSAGE

It gives me great pleasure to present the annual As a corporate citizen, we take our corporate social report for 2017. As always, we stayed true to our responsibility seriously and we consider the impact mission of providing electricity to enrich the lives of on the community in our decision-making process. the public every day in every way and everywhere in We have been involved in multiple education a reliable, fast and honest manner. outreach and apprentice programs, fulfilling our commitment to help young people develop their The year has been an important year for the aspirations. We recognize there is more to do, and company. While several projects for expansion of we are determined to excel in the year ahead. STELCO’s generating capacity was going on, important changes were brought to the Company’s On behalf of the Board of Directors, management management and operations. I am happy to and staff of STELCO, I convey our sincere gratitude announce that the steps taken by the management to His Excellency President Abdulla Yameen Abdul were successful in making STELCO a more Gayoom, for the trust he has placed in STELCO and sustainable company. the continued support and guidance we have received throughout this period. I would also like to Our efforts are geared towards fulfilling the express my appreciation to the Board of Directors of demands of our customers. At the same time the STELCO for their advice, and counsel in formulating Company has to ensure that our services are at par the Company’s strategies and policies. Moreover, with the rapid development and expansion that the we would not have achieved our successes without country is undergoing under the leadership of His the blessing of Almighty Allah, from whom we seek Excellency President Abdulla Yameen Abdul guidance. Gayoom. We recognize that we serve a vital role in the The Board of Directors are committed to continue development of the nation, and we will continue to the work on refining the corporate governance meet customer demand and seek customer structure and practices to reflect the best interests of satisfaction through management excellence and the Company. We believe that transparency, staff satisfaction, as we serve our customers each accountability and responsibility should run day. I am proud of the progress we made in throughout the Company. The Board takes matters advancing our goals in the year 2017 and I am of ethics and compliance very seriously and aims to energized about future prospects as we enter fiscal set a tone at the top which pervades throughout the year 2018 with a healthier financial position, well organization. positioned and better equipped to take on the challenges of the future. While we expand our generating capacity and distribution infrastructure, investing for the development of the Company’s human capital remains a top priority. During the year we have made good progress in our commitments to make the Company a great place to work, not least with our Ahmed Aiman, short and long-term training programs. Chairman

Page 3 CEO’S MESSAGE

2017 has been a concrete year of progress for continuous efforts to fulfill our mission of providing STELCO. When I started my tenure at STELCO on electricity to enrich the lives of the public every day in 4th June 2017, the Company was operating at a every way and everywhere in a reliable, fast and deficit and so, my main target for STELCO in 2017 honest manner. Our achievements of this past year was to lay the foundation to make it a cost-effective are the result of the dedication, talent and hard work company. In order to achieve this, we focused on of our staff. For this, I would like to extend my thanks restructuring the Company, regulating the cash and gratitude to the entire staff of STELCO as their outflows, taking strategic measures to bring gearing hard work has paved the way for the Company to to a healthy level, identifying foreseeable technical make successive strides towards achieving our obstacles, introducing innovative financial strategic goals. I believe STELCO’s future depends mechanisms, addressing staff welfare issues and on efficiency and reliability with a professional and taking proactive measures. These measures proved productive workforce and by focusing on staff to be effective, as within 6 months, STELCO posted welfare. As such, we have managed to establish a a record turnover. Our staff and management are welfare board as well as begun the construction of a committed to ensuring that our Company continues staff housing project. with positive outcome leaving the negative cash flow behind by bringing efficiency and productivity. I am grateful to the Board of Directors for their direction, guidance and support to create strategic I am content with the progress we made in 2017. We goals, and their assistance to the management in have a vibrant, highly dedicated workforce that delivering for the continued success of the continues to impress me with their work ethics. We Company. Furthermore, we would not be where we have good momentum on our way to position are today without the devotion and zest of our ourselves for a future with improved financial management team and our hardworking employees stability. Clearly, we have much to enhance by who serve the Company across the country. making further progress in our product and service delivery. I am very confident in our ability to capture We assure our customers that we will relentlessly the opportunities and deal with the challenges work to maintain a provident and proactive ahead. We have initiated huge capital infrastructure approach to business development and vigorously projects to cater for our future demand. implement our strategies. We will further our efforts in promoting innovation-driven growth to improve During the year 2017, we remained steadfast in our quality and efficiency of our services. Additionally, vision to achieve total customer satisfaction. We we wish to work towards making STELCO an ISO worked as a team that serves this nation in good certified Company in the near future. faith and will remain as a team working with the elected government. We believe STELCO’s We thank Almighty Allah for the blessings bestowed achievements are masterminded by the visionary upon us. We pray for more prosperous years ahead leader, His Excellency President Abdulla Yameen towards maximizing value for our stakeholders. Abdul Gayoom. I convey my sincere gratitude for the trust he has placed in us and for the continued reinforcement we have received throughout.

Our success in these endeavors is the result of the Ahmed Zuhoor commitment we have for our customers, and Chief Executive Officer

Page 4 BOARD OF DIRECTORS

Ahmed Aiman was appointed as the Chairman of the Board of Directors in October 2016. He currently holds the position of Director and Media Coordinator at the Ministry of Finance & Treasury. He is also an active member of the Arts Development Fund committee at the National Center for the Arts under Ministry of Tourism since 2012. He has served as a member of Land Valuation Committee and as a Media Secretary at the Ministry of Finance & Treasury. He has also served as a Principal of Aliya School, and as a supervisor of Galolhu Madharusa.

Aiman holds a Master’s Degree in Business Administration from Ahmed Aiman Anglia Ruskin University in United Kingdom. Chairman Non-Executive Director

Ahmed Zuhoor was appointed as the CEO of the Company and as an Executive Director of the Board on June 2017. He has been the Country Representative & Resident Governor of Maldives for World Bank since 2016. In addition, he has served the Government of Maldives as a Minister at the President’s Office and Chair of Economic & Youth Council, Minister of Home Affairs, Minister of Youth and Sports, Minister of Health, Commissioner General of Customs at Maldives Customs Services and Chairman of Maldives Tender Board. He is also a Board Member of Ooredoo Maldives PLC.

Zuhoor holds a Master’s degree in Accounting and Financial Management, and a Master of Business Administration degree from La Trobe University, Australia. He also holds a Master of Science Ahmed Zuhoor degree (MSc) specializing in Maritime Affairs and Maritime Safety Chief Executive Officer & from World Maritime University, Sweden. Zuhoor is also a certified Executive Director Marine Engineer Class 1 (unlimited) from Australian Maritime Safety Authority (AMSA), after graduating in Engineering at Royal Melbourne Institute of Technology (RMIT), Australia.

Abdul Rahman Arif was appointed as a Director of the Board in 2013. He is currently the Chief Engineer at Sun Hotels & Resorts and has over 15 years of experience in the field.

Abdul Rahman Arif Non-Executive Director

Page 5 BOARD OF DIRECTORS

Mohamed Waseem was appointed as a Director of the Board in 2013. Waseem served the Government in various capacities for a period of 15 years, during which he served in the education sector and as Assistant Island Chief of Sh.Komandoo. He also served as a Board Member of Maldives Post Limited for three years.

Waseem holds a Diploma in Human Resource Management.

Mohamed Waseem Non-Executive Director

Mariyam Shafeega was appointed as a Director of the Board in 2016. She currently serves in the Ministry of Housing and Infrastructure as a Director. She has a lengthy record of service to the Government and has served as the Third Secretary at the Maldives High Commission in Colombo, Sri Lanka.

Shafeega holds a Bachelor’s Degree in Business Administration.

Mariyam Shafeega Non-Executive Director

Mr. Abdul Shakoor Solih served as the Managing Director and Board Member until June 2017. He served the Company for 35 years. We thank him for his invaluable contribution towards the development and improvement of the Company during his tenure.

Abdul Shakoor Solih Former Managing Director & Executive Director

Page 6 EXECUTIVE MANAGEMENT

Zuhoor holds a Master’s degree in Accounting and Financial Management, and a Master of Business Administration degree from La Trobe University, Australia. He also holds a Master of Science degree (MSc) specializing in Maritime Affairs and Maritime Safety Ahmed Zuhoor from World Maritime University, Sweden. Zuhoor is also a certified Chief Executive Officer & Marine Engineer Class 1 (unlimited) from Australian Maritime Safety Executive Director Authority (AMSA), after graduating in Engineering at Royal Melbourne Institute of Technology (RMIT), Australia.

Mohamed Latheef joined STELCO in 1989, and currently holds the position of Deputy Managing Director of the Company. He has held various executive posts including the posts of Head of Projects, Planning & Information Technology, Strategy & Development and Transport & Maintenance Department. He also served as the Board Secretary of STELCO from 2001 to 2008.

Latheef holds a Bachelor of multi-disciplinary Science degree from Curtin University of Technology, Australia.

Mohamed Latheef Deputy Managing Director

Aishath Muzna joined STELCO in 2000, and currently is the Head of STELCO Bureau. She was also appointed as Company Secretary in August 2017. During her years of service, she has held various executive posts including the posts of Head of Procurement and Inventory Management, Information Technology Department and Customer Services and Billing Department.

Muzna holds a Bachelor of Arts Degree in Accounting and Finance from University of East London, United Kingdom. Aishath Muzna Company Secretary & Deputy Director

Page 7 EXECUTIVE MANAGEMENT

Fayz Waheed joined STELCO in 1986, and currently is the Head of Plant Maintenance Department of the Company. He has held various executive posts including the posts of Head of Transport & Maintenance Department, In charge of Villingili Powerhouse and Hulhumalé Powerhouse.

Fayz holds a Trade Certificate in Automotive from Islamic Centre for Technical and Vocational Training, Bangladesh.

Fayz Waheed Director

Ahmed Shafeeu joined STELCO in 1991, and currently is the Head of Transmission and Distribution Department of the Company. He has held various executive posts including the posts of Head of Business Development, Billing Services, Greater Malé Region, Regional and Customer Services & Information Technology Department.

Shafeeu holds a Post Graduate Diploma in Electrical Power Systems from Norconsult International AS, Norway and a Bachelor of Sceince Degree in Electrical and Electronic Engineering from Islamic Institute of Technology, Bangladesh. Ahmed Shafeeu Director

Ahmed Iqbal joined STELCO in 1991, and currently is the Head of Mechanical and Regional Department of the Company. He has held various executive posts including the posts of Head of Greater Malé Region and Regional Department.

Iqbal holds a Bachelor of Mechanical Engineering degree from University of Leicester, United Kingdom and an Associate Diploma in Electrical Engineering from South Australian Institute of Vocational Education. Ahmed Iqbal Director

Page 8 EXECUTIVE MANAGEMENT

Abdulla Mushrif joined STELCO in 2003, and currently is the Head of Information Technology Department of the Company. Prior to that he has also served as Head of Instrumentation and Controls Department.

Mushrif holds a BTEC Higher National Diploma in Operational Telecommunications from The Cable and Wireless College.

Abdulla Mushrif Director

Hassan Hussain joined STELCO in 1982, and currently serves in the capacity of Head of Transport & Maintenance Department of the Company. He has held various executive posts including the posts of Head of Managing Director’s Bureau and In-charge of Hulhumalé Powerhouse.

Hassan holds an Advance Certificate in Office Management from the Centre for Management and Human Resource Development, Maldives.

Hassan Hussain Director

Aminath Rizna joined STELCO in 1995, and currently is the Head of Corporate Affairs Department of the Company. Prior to that, she held the post of Head of Human Resources Department.

Rizna holds a Bachelor of Arts degree in Business Administration from University of Hertfordshire, United Kingdom.

Aminath Rizna Director

Page 9 EXECUTIVE MANAGEMENT

Ibrahim Nizam joined STELCO in 1997, and currently serves as the Head of Customer Services and Billing Department of the Company. He has also held various other executive posts including the posts of Head of Power Generation, Business Development and Water Production Department.

Nizam holds a Master of Science degree in Electrical Power Engineering from The University of Manchester, United Kingdom and a Bachelor of Engineering degree in Electronic and Electrical Engineering (Power Engineering) from University of Strathclyde, Ibrahim Nizam United Kingdom. Director

Hussain Fahmy joined STELCO in 1998, and currently is the Head of Business Development Department of the Company. Prior to that he has held various executive posts including the posts of the post of Head of Procurement & Inventory Management and Customer Services & Billing Department.

Fahmy holds a Master of Arts in Accountancy from University of Aberdeen, United Kingdom and Master of Business Administration from University of East London, United Kingdom.

Hussain Fahmy Director

Ibrahim Nashid joined STELCO in 2000, and currently is the Head of Electrical Department. He has held various executive posts including the posts of Head of Transmission & Distribution and Information Technology.

Nashid holds a Bachelor of Electrical and Electronic Engineering Degree from University of Hertfordshire, United Kingdom.

Ibrahim Nashid Director

Page 10 EXECUTIVE MANAGEMENT

Ahmed Saif joined STELCO in 1997, and currently is the Head of Projects, Planning & Implementation Department of the Company. He has held various executive posts including the posts of Head of Procurement & Inventory Management and Customer Services Department.

Saif holds a Bachelor of Electrical and Electronic Engineering degree from University of Leicester, United Kingdom.

Ahmed Saif Director

Ibrahim Rauf joined STELCO in 1991, and currently is the Head of Instrumentation and Controls Department of the Company. Prior to that, he held the post of Head of the Electrical Department.

Rauf holds a BTEC National Diploma in Engineering.

Ibrahim Rauf Director

Ahmed Sharneez joined STELCO in 1997, and currently is the Head of Hulhumalé Powerhouse. He has held various executive posts including the posts of Head of Regional Department and Water Production Department.

Sharneez holds a Bachelor of Mechanical Engineering degree from University of Bradford, United Kingdom.

Ahmed Sharneez Director

Page 11 EXECUTIVE MANAGEMENT

Ahmed Ibrahim joined STELCO in 1999, and currently serves as the Head of Internal Audit Department of the Company. He has held various executive posts including the posts of Head of Information Technology and Training & Development Department.

Ahmed holds a Master of Science in Management from Lund University, Sweden and Bachelor of Engineering in Information Technology & Telecommunications from The University of Adelaide, Australia. Ahmed Ibrahim Deputy Director

Mohamed Saleem joined STELCO in November 2002 and currently is the Head of Finance & Accounts Department of the Company. He has held various executive posts including the posts of Head of Internal Audit and In-charge of HA.Hoarafushi Powerhouse.

Saleem holds a Master of Business Administration degree from University of Wales, United Kingdom.

Mohamed Saleem Director

Abdulla Nazir joined STELCO in 2001, and currently is the Head of Human Resources Department of the Company. He also was the Head of Corporate Affairs Department. He served as the Board Secretary of STELCO from 2010 to 2014.

Nazir holds a Bachelor of Arts degree in Business Administration from University of East London, United Kingdom.

Abdulla Nazir Deputy Director

Page 12 EXECUTIVE MANAGEMENT

Abdul Malik Thoufeeg joined STELCO in 1999, and currently is the Head of Procurement Department of the Company. He also worked in Electrical Department, Customer Service Department as well as Projects, Planning & Implementation Department.

Malik holds a Master of Business Administration degree from Ritsumeikan Asia Pacific University, Japan and Bachelor of Electrical & Electronic Engineering degree from University of Hertfordshire, United Kingdom. Abdul Malik Thoufeeg Senior Engineer

Mohamed Shahid joined STELCO in 1995, and currently is the Head of Training and Development Department of the Company. He has held various executive posts including the posts of Head of Internal Audit and In charge of GDH.Gadhdhoo Powerhouse.

Shahid holds a Graduate Diploma in Management from Avid College, Maldives.

Mohamed Shahidh Deputy Director

Page 13 HOW WE GREW

Fifth Power Development Project 2016 - 2018 6 X 8700 kW Generator Sets installed

Fourth Power Development Extension Project 2017 8700 kW Generator Sets installed

Fourth Power Development Project 2008 - 2012 2 X 8700 kW Generator Sets Installed

2000 - 2002 Third Power Development Project 2 X 6500 kW Generator Sets Installed

STELCO Incorporated 1998 “State Electric Company Limited” established as company.

Second Power Development Project 1996 - 1997 5700kW and 4000kW installed

New powerhouse constructed on south east side of Male’. 1958 - 1994 Power Development Project 3 x 2000kW installed.

Institution Renamed. 1982 Renamed to Maldives Electricity Board

First Substation Installed 1964 In addition, underground cables laid to powerhouse

Power Generation Capacity Upgrade 1960 2 X 238 kW Generator Sets installed.

“Baa Enginege” Established 1958 Power generation capacity 2X75 kW.

Power Generation Capacity Upgrade 1953 2 X 38 kW Generator Sets installed.

First Powerhouse established at H.Orchidmaage 1949 with installed capacity of only 14 kW.

Page 14 WHO WE SERVE

Institutional and Governmental 1,664 Customers 3%

Commercial 13,720 Customers 24%

Residential 41,525 Customers 73%

Total Customer Base 56,909

Page 15 STATISTICAL HIGHLIGHTS

OUR STAFF

117 471 NEW HIRES STAFF HIRED IN 2017 2013-2017

100% 868 MALDIVIAN TOTAL STAFF

OUR CORE BUSINESS 35 Power Systems 4 Water Networks

SERVING OVER 52% OF THE POPULATION (Based on Census 2014)

ENVIRONMENTAL UPGRADE OF THE YEAR STELCO - Solar Hybrid Power System Project 2017

Page 16 FINANCIAL HIGHLIGHTS - 2017

R E V E N U E EXPENDITURE +17% +9% MVR 1,698 million MVR 1,645 million

NET GROWTH TOTAL ASSETS +187% +32% MVR 52 million MVR 2,836 million

TOTAL LIABILITIES TOTAL INVESTMENTS +38% +72% MVR 2,298 million MVR 655 million

Page 17 OUR FOOTPRINT K. Kaashidhoo

K. Gaafaru

K. Dhiffushi

AA. Thoddoo

K. Thulusdhoo AA. Ukulhas

K. Himmafushi AA. Rasdhoo AA. Bodufolhudhoo K. Hulhumale' K.Thilafushi AA. Mathiveri K. Male' K.Gulhifalhu AA. Feridhoo K. Villimale'

AA. Maalhos K. Gulhi ADH. Hangnaameedhoo AA. Himandhoo K. Maafushi ADH. Omadhoo K. Guraidhoo ADH. Kunburudhoo V. Fulidhoo ADH. Mahibadhoo ADH. Mandhoo V. Thinadhoo ADH. Dhangethi

V. Felidhoo

ADH. Dhigurah ADH. Fenfushi

ADH. Dhidhdhoo V. Rakeedhoo V. Keyodhoo

Page 18 MARKET REVIEW

2017 was a year of notable growth backed by Technology Adoption government initiatives of infrastructure development, which led to a rapid rise in the Technology is changing the way power is demand of electricity. Some of the produced and managed. It is also impacting macroeconomic drivers that affected our consumer behavior which is presenting new business are as below. opportunities and challenges. Modern technologies were introduced at electricity production and distribution areas as well as on Fuel Price the customer front to provide reliable customer Fuel expenditure accounts for 90% of our care. production cost. Fuel cost is a critical component of profit and sustainability. From a macroeconomic perspective, being Production costs were held at a stable rate due around for over six decades has given us the to governments initiative to control fuel price. opportunity to serve the public throughout the growth of the country, and we recognize the loyalty and trust of our customers that have enabled us to come this far. But being a state owned enterprise that has heavily relied on the state for financing our growth, we still need assistance for our future expansion.

Diversification into new areas of business complementary to power generation has opened new avenues for business expansion. STELCO Male’ Powerhouse fuel farm But regulatory changes and keeping up with new technological advancements as well as evolving customer needs are challenges which Rapid Urbanization we need to focus on today. With high growth of the economy and development of Hulhumale’, guest houses and other infrastructures, this has led to high demand for energy.

Page 19 STRATEGIC REVIEW

POWER GENERATION

Our principle power is derived from diesel Energy Management Systems with solar generator sets. Depending on island load photovoltaic (PV) and battery backups are used profile, multiple generator sets are used in in two islands to generate power. We are proud combination with synchronization panels to to state that these two islands are able to cater deliver the power. Our aim is to ensure for daytime load demand completely from solar operational excellence and cost efficiency are PV without the need to run the diesel at the heart of our power generation process. generators.

35 Individual Powerhouse Male’ Total Capacity Total Generation Capacity on 35 Islands 81,432 kW 129,206 kW

Generation Highlights 2017

To increase Male’ Powerhouse capacity, Furthermore, the power interruption 8700kW generator set was installed. associated with the generator switch-over was eliminated, enabling customers to To increase Hulhumale’ Powerhouse enjoy uninterrupted power 24/7. capacity, 2x1600kW generator sets were installed and network was upgraded. STELCO has taken over 7 island powerhouses since 2013. Most of the In 2017, three island powerhouses were islands have been upgraded with additional synchronized by replacement of manual generation capacity and synchronization control panels with automatic panels, facilities. Currently five islands remain which increased the generation without synchronization facilities and capabilities as well as well as generation S T E L C O a i m s t o c o m p l e t e t h e flexibility to cater for the demand. synchronization of these islands by end of 2018.

Page 20 Capacity Increase from 2014 (Excluding Greater Male’ region) Vaavu Alif Alif Alif Dhaalu Kaafu

10MW

8MW

6MW

4MW

2MW

MV 2014 2015 2016 2017

Total Capacity and Load Demand - 2017 (More than 1 MW)

Male’

Villingili

Hulhumale’

Thilafushi

Maafushi

10MW 20MW 30MW 40MW 50MW 60MW 70MW

Peak Available Capacity

Page 21 Total Capacity and Load Demand - 2017 (Less than 1 MW)

Gulhifalhu Himmafushi Kaashidhoo Gaafaru Dhiffushi Thulusdhoo Gulhi Guraidhoo Mandhoo Hangnameedhoo

Kumburudhoo Omadhoo Mahibadhoo Dhangethi

Dhigurah

Dhihdhoo Fenfushi Thoddoo Rasdhoo Ukulhas Bodufolhudhoo Mathiveri Feridhoo Maalhos Himandhoo Rakeedhoo Keyodhoo

Felidhoo Thinadhoo Fulidhoo

kW 200kW 400kW 600kW 800kW 1000kW 1200kW 1400kW

Peak Available Capacity Page 22 Largest Power Project in the Maldives

The last major power project done in Maldives In STELCO’s rich past history 81MW of power was the STELCO Fourth Power Development was installed in Male’ and in 2013, STELCO Project under which 16MW of power was took up the challenge of increasing the capacity installed in Male’ power plant in 2012. by an additional 50MW.

Under His Excellency President Yameen Abdul The foundation of the project was laid on 31st Gayoom’s presidency, one of the first orders of July 2016 and currently the project is to be business was to design and build a powerplant commissioned in October 2018. to cater for the upcoming developments of the Male’ region. The 50 MW Power Plant will be a modern state of the art power plant with enough capacity to With this vision in mind, the STELCO Fifth cover Hulhumale’ load requirements until year Power Development Project was formulated. 2022 with excess power to be exported via the The project though initially meant to be power cable laid over the Sinamale’ bridge. constructed in Male’ was relocated to Hulhumale’ to construct new power projects in non-residential areas.

H.E President Abdulla Yameen Abdul Gayoom lays foundation of 5th Power Development Project

Page 23 DISTRIBUTION SYSTEM

Electric power distribution is the final stage in providing electricity to match the current and the delivery of electric power; it carries forecasted growth demand of our customers. electricity from the generation system to individual consumers. In 2017, additional 11 transformers were added to the distribution system costing in excess of With the rapid increase in demand, network MVR 35 million. Over 15km of cable were laid planning and upgrading is a key priority area to and commissioned costing in excess of MVR ensure reliability of the service. 18 million. By the end of 2017, a total of 151 substations were operational. A project was Between 2007 and 2017, the consumption of carried out to implement a reliable electricity in Malé has increased by 91% while communication network between the the number of customers increased by 70%. substations to decrease the power restoration time during a power failure as well as monitor We have continued to match the demand for the electrical parameters of the distribution electricity with generation and distribution system. capacity by continuous investment and expansion. In Male’ in the year 2017, on average each customer experienced an uptime of 99.96%. Due to the efforts of the last four years we are now at a stage where we are confident of

Hulhumale’ - Peak Load Projections (MW) - 2010 to 2025

65.00

60.00 GE 19 (9MW) Peak Load Actual GE 18 (9MW) 55.00 GE 17 (9MW) Peak Load 50.00 @ Normal growth GE 16 (9MW) (Forecast) GE 15 (9MW) 45.00 GE 14 (9MW)

40.00 Temp 2 (1.6MW) ] Temp 1 (1.6MW)

[MW 35.00 34.47 GE 13 (1.6MW) 30.00 GE 12 (1.6MW) GE 11 (1MW) 25.00 25.72 GE 10 (1MW) 20.00 GE 8 (1MW) 19.19 GE 7 (1MW) 15.00 14.32 10.69 GE 6 (1MW) 10.00 6.25 8.80 GE 4 (1MW) 3.66 4.74 GE 3 (1MW) 5.00 2.41 2.73 1.66 1.98 GE 2 (1.2MW) 0.00 GE 1 (0.8MW) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year

Page 24 HUMAN RESOURCES

STELCO currently employs 868 staff across 35 Staff Development powerhouses. This includes 469 staff at Male’ Capacity Building is a core area of STELCO and and 399 staff in islands. As of 2017, 117 are continuous training programs are held female and 751 are male. throughout the year both in-house and external. STELCO has a comprehensive scholarship STELCO is proud to have a high staff retention scheme which had a total of 18 staff studying ratio, as we have over 120 employees who have abroad on full and partially paid scholarships. served the Company loyally for more than 20 years. In the year 2017, STELCO has hired 31 people with special needs under an initiative of President Abdulla Yameen Abdul Gayoom to provide equal job opportunities to all.

As part of strengthening our staff training program, employees from different departments are given the chance to take part in training programs in important areas for the Company. Moreover, the Company already STELCO believe that a highly motivated and carries out Electrician Course -Certificate Level dedicated workforce is essential for the 3 in collaboration with Technical and Vocational success of the Company. Within the past three Education and Training (TVET), with qualified years, STELCO’s workforce has increased employees from STELCO acting as the trainers. tremendously. Our staff development programs ensures career development and progress for staff and is designed to strengthen technical and leadership capability in order to enhance their performance. To this effect, several programs are undertaken each year as part of motivating the team.

Page 25 Youth and STELCO Industrial Training & Internships

With a growing majority of young adults in For industrial training purposes opportunities Maldives, STELCO gives great importance to are given to students from Universities and youth development. During the past couple of colleges to gain knowledge and to learn with years, STELCO has worked to incorporate this our expert teams. We also continue to support into the Company’s Human Resource “DHASVAARU” program for students from practices. In 2017, 99 young adults started different schools. Furthermore, students are their careers at STELCO. given the opportunity to visit STELCO for educational field trips.

Youth@STELCO - paving the way forward Students visiting STELCO Male’ Powerhouse.

Increasing Women in the Workforce The internship program established in 2015 was mainly focused for interested youth. The In order to increase the involvement of women enactment of Internship policy provided a in various fields and to empower women in the platform for interns to acquire experience and society, we have planned and carried out at the same time earn an income. STELCO has various activities. The objective is to raise the offered more than 40 permanent job positions ratio of women in the team to 30%, in line with to interns who performed well during their the national vision. In this regard a program was internship in 2017. initiated in 2017 to conduct a “Basic Electrician Course” for women. A total of 146 ladies participated and completed the course.

Women Empowernment, key target within STELCO

Page 26 Staff Recognition STELCO Hiyaa

STELCO places great emphasis on “Hiyaa” housing project is a mega project recognizing, appreciating and lauding diligent initiated by His Excellency President Abdulla and productive employees. In this regard, 10 Yameen Abdul Gayoom to build 10,080 employees with 20 years or more service and a housing units for civil servants and employees further 50 employees were presented with of state owned enterprises. STELCO took the plaques and commemorative certificates initiative to join the ‘Hiyaa’ project and was able during the Company’s 67th anniversary event in to secure two plots of land. order to appreciate and recognize their valued service to the Company. Under the “STELCO Hiyaa Project”, the construction of two residential towers of 12,000 sqft in Hulhumalé phase 2 with 384 apartments are planned. All the employees were given the Hajj and Umra Scheme opportunity to apply for the housing scheme and all those who applied were awarded the Each year, one employee is given the opportunity to purchase housing units from opportunity to perform Hajj pilgrimage and in ‘STELCO Hiyaa’. Under this scheme flexible addition one employee is given Umra financing mechanisms were arranged for the opportunity fully sponsored by the Company. applicants. As of 2017, a total of 10 staff have been given opportunities under this program.

Medical Insurance We believe a healthy workforce is the key to success of the Company. Staff and their dependents have been insured and provided with a health benefit scheme for several years now.

In 2017 work began on an internal insurance STELCO Hiyaa Flat - concept model scheme to provide better benefits for the staff.

Page 27 STELCO Cooperative Society

STELCO Cooperative Society’ (SCS) formed in The objective of SCS is to conduct business 2017, was recognized as a significant initiation activities to raise funds for staff activities and made by the Company for the betterment of the welfare. The SCS is managed by elected employees. officials from STELCO staff

STELCO Recreation Club

STELCO Recreation Club (SRC) was formed to offer a platform for the employees to develop team spirit, friendship and unity amongst each other. STELCO Club conducts several sports and recreational activities each year and represents the Company at national tournaments and other events.

At STELCO we believe that the satisfaction of the employee is the key to customer satisfaction. STELCO Recreation Club (SRC) functions to promote healthy and active lifestyle All the activities are planned and executed within the employees. according to the rules and regulations of the STELCO Recreation Club and also with the With the intention of achieving this, every year guidance from STELCO management. SRC organizes various recreational activities and events such as:

§ Futsal tournament § ”Masreys” (Fishing expeditions) § Volleyball tournament § Handball tournament § Billiards tournament § Badminton tournament etc.

Page 28 CORPORATE SOCIAL RESPONSIBILITY

CSR initiatives have been an integral part of STELCO for the year 2017. The largest CSR contribution for the year was ‘Muiveyo Maizaan’ (Children’s Park), for the benefit of residents of Male’. We also contributed towards the construction of ‘Rasfannu’ by redesigning and upgrading the distribution network in the area as well as assisting the stakeholders with all electrical installations.

As part of our CSR initiative to include and educate children in the energy sector, we encourage and assist school tours in visiting our powerhouses. This gives an opportunity for the children to experience the electricity generating and distribution process firsthand, as well as give an opportunity for them to interact with our engineering team and ask questions. We also technically and financially assist NGOs.

The STELCO calendar of 2017 was dedicated to the children with special needs. The calendar was designed by incorporating the artwork provided by children and events were held throughout the year with the participation of children with special needs and company staff. We have also contributed to play area of schools by donating recreational equipment.

Page 29 CUSTOMER SERVICES

As a utility service provider, we are challenged One of the key areas focused in 2017 was the every day to deliver outstanding customer introduction of Net Metering Service to our service whilst maximizing value and customers. Net Metering Service enables performance. In today’s competitive customers to install solar PV and feed to the environment we need advanced tools to grid to offset the energy consumption. optimize customer service delivery and manage critical infrastructure. The central billing system was expanded to our island powerhouses, hence billing services, Our goal is to provide customers with the highly payment collections and customer services responsive service they desire. To achieve this were incorporated into the central billing we are continuously reviewing and improving system which increased the speed and our processes for managing accounts, reliability of services. In addition to this portable handling payments, resolving billing issues, meter reading devices were introduced to responding to information and field service island power houses to make the meter reading requests and notifying customers during process more efficient and group billing system service disruptions. We will identify ways to was introduced to consolidate the bills of one streamline these processes and implement customer who may have multiple meters strategies that ensure the reliable use of utility across our service region. resources to meet the present and future needs of our customers. In the year 2017, a total of over 4100 new customers acquired our services. In the year 2017 we have managed to do so by introducing and implementing some services which have enhanced the customer service experience.

STELCO Service Counter

Page 30 Payment Collection Outlets

Bill payment was made easier with the introduction of outsourced payment collection services. Customer payments can be accepted at the following outlets.

§ Post Shop - Velaanaage § Post Office - Hulhule’ § Post Office - Hulhumale’ § Male’ Post Building Head Office § Smart Phone § Ell Mobile - Maafannu § Ell Mobile - Henveyru § Majestic Mobiles § 727 Teleshop (Villingili)

Payment Options

For the tech savvy customers, online methods were introduced. Currently the following services can be used to make payments;

STELCO e-Pay STELCO Mobile Direct Debit BML BillPay Ooreedhoo Application m-Faisaa

Bill Information

For our customer to check bill information the following methods can be used:

STELCO e-Bill (https://ebill.stelco.com.mv/) STELCO Mobile Application

Page 31 FINANCIAL OVERVIEW

2017 ended on a high note with a profit of MVR to restructure the balance sheet, by converting 52 million. Though this is a huge achievement all loans of completed projects totaling MVR towards being sustainable, the financial 1.5billion to equity. This will reduce the gearing commitments of STELCO is an area of concern. ratio to 19%. The gearing ratio of STELCO has increased from 67% to 73% in 2017, which will have a By increasing overall efficiency of power negative impact on our borrowing ability. generation and distribution together with the implementation of measures to minimize Currently STELCO’s financial commitment is operating costs, the Company has achieved a MVR 1.9 billion (loan and interest). All these significant saving on costs. This translates to a commitments are to Ministry of Finance and positive impact on the income statement with Treasury and STELCO is currently negotiating an increase of 187% compared to 2016.

Financial Highlights

2017 Description 2013 2014 2015 2016 2017 growth Total Revenue 1,604,094,747 1,702,569,791 1,616,226,688 1,448,438,635 1,698,584,021 +17% Total Expenses 1,632,761,842 1,759,991,105 1,713,400,859 1,508,980,614 1,645,720,361 +9% Profit after BusinessTax (28,667,095) (57,421,314) (97,174,171) (60,541,979) 52,863,660 +187% Total Assets 2,237,467,324 2,107,847,319 2,095,883,053 2,155,050,519 2,836,512,258 +32% Total Liabilities 1,539,820,650 1,462,473,361 1,542,534,189 1,660,170,668 2,298,374,231 +38% Cash, Cash equivalents (515,484) 38,376,532 32,153,370 29,763,708 133,526,633 +349%

Net Income Before Tax 2013 - 2017

The Company had been incurring losses since In 2017, the company was able to achieve 2013, the main reasons being the high cost of profitability in its operations. repair and maintenance and other operating expenses.

NET INCOME BEFORE TAX 80 60 40 59 20 Y2013 Y2014 Y2015 Y2016 (MVR) -23 Y2017 -20 -51

Millions -65 -40 -91 -60 -80 -100

Page 32 Revenue

STELCO posted top-line revenue of MVR1,698 This double-digit growth is mainly due to million at the end of the fiscal year on 31st increase in the Company’s customer base December 2017, recording a substantial coupled with increase in demand for electricity increase of MVR250 million, which represents especially from commercial customers. 17% growth compared to previous year.

REVENUE AND EXPENDITURE CHART 2000

1600

1200 (MVR)

800 Millions 400

2014 2015 2016 2017

Revenue Expenditure

Expenses

By taking stringent measures to improve Hence, the unit cost of production was efficiency of electricity production and reducing reduced, enabling us to maintain 18% gross costs by implementing innovative procurement margin in 2017. methodologies, the cost of production was maintained at a reasonable level.

Page 33 Capital Investment

Provision of reliable electricity service In this endeavor, a total of MVR655 million was continuously requires expansion and invested in 2017 for the improvement and upgrading of power generation, transmission & expansion of electricity infrastructure, which is distribution. Hence, capital investments on an increase of 72% compared to previous year. improving and expanding the electricity infrastructure have always been our utmost priority.

CAPITAL INVESTMENT 2013 TO 2017

700 600 500 (MVR) 400 300 Millions 200 100

2013 2014 2015 2016 2017

EQUITY AND LIABILITIES COMPOSITION OF LIABILITIES

Non current liabilities 48%

Capital and reserves 19% Current liabilities Total liabilities 33% 81%

Cash and cash equivalents TOTAL ASSETS COMPOSITION OF 5% FIXED ASSETS Property, plant and equipment 58%

Trade and other Fixed Assets receivables 78% 12%

Inventories Capital work in 5% Fixed Assets progress 78% 20%

Page 34 SEGMENT-WISE PERFORMANCE (2017)

Demand HULHUMALE’ Demand MALE’ 56,048kW 8,800kW

Total Income 200 Total Income 189,205,251 Total Expenses 1,400 184,990,435 1,206,899,515 Total Expenses 180 1,166,569,196 1200 160 140

1,000 (MVR)

(MVR) 120 800 100 Millions

Millions 600 80 400 60 40 200 Net Profit after BPT Net Profit 33,492,196 20 4,214,816 - -

Demand Demand K. VILLINGILI 2,031kW K. THILAFUSHI 1,067kW

60 Total Expenses Total Income Total Income 48,530,406 50 23,324,537 41,713,488 25 Total Expenses 40 19,405,532 20

(MVR) 30

20 (MVR) 15

Millions 10 10 - Millions 5 -10 Net Loss Net Profit (6,816,919) 3,919,005 -

Demand K. GULHIFALHU 69kW SALES CENTRE

Total Expenses Total Income 6 5,237,650 25 22,351,956

4 20 Total Income 1,174,685 2 Net Profit (MVR) 15 12,866,737

0 (MVR) Total Expenses 9,485,219 Millions (2) 10 Millions (4) Net Loss 5 (6) (4,062,965) -

Demand Demand K. GURAIDHOO 531kW K. HIMMAFUSHI 540kW

Total Income Total Expenses 14 Total Income 12,008,126 12,385,463 16 14,513,352 12 Total Expenses 14 10 11,617,582 8 12

(MVR) 6 10 (MVR) 4 8

Millions 2

Millions 6 - Net Profit 4 2,895,770 (2) Net Loss (377,337) 2 -

Page 35 Demand K. THULUSDHOO Demand K. MAAFUSHI 1,389 kW 636 kW

Total Income Total Income 16 14,812,440 50 43,993,924 Total Expenses 14 13,167,805 40

(MVR) 12

(MVR) Total Expenses 10 30 25,114,254 Net Profit Millions 8 Millions 18,879,670 20 6

4 Net Profit 10 1,644,635 2 - -

Demand Demand K. KAASHIDHOO 389kW K. GAAFARU 301kW

12 Total Expenses Total Expenses 9,841,459 Total Income 8 6,677,522 10 8,506,015 7 Total Income 5,364,901 8 6 5 (MVR) 6 (MVR) 4 4 3 2 Millions Millions 2 1 - - (1) (2) Net Loss (2) Net Loss (1,335,444) (1,312,621)

Demand Demand K. GULHI 240kW K. DHIFFUSHI 431kW

Total Expenses Total Income 5,457,162 6 Total Income 8 7,371,749 5 4,585,014 Total Expenses 7 6,212,232 4 6 3 Net Profit (MVR) 2 5 1,159,518 (MVR) 1 4 Millions - 3 Millions (1) 2 Net Loss (2) (872,148) 1 -

Demand Demand AA. BODUFOLHADHOO 180kW AA. FERIDHOO 140kW

6 14 Total Expenses Total Expenses 12 3,619,657 Total Income 4,178,241 4 Total Income 10 3,388,085 2,343,738

8 (MVR) 2 (MVR) 6 4 Millions

Millions 2 - - (2) Net Loss (2) Net Loss (790,156) (1,275,919)

Page 36 Demand ADH. MAHIBADHOO Demand ADH. HANGNAAMEEDHOO 133 kW 638 kW

6 Total Expenses Total Income Total Income 3,434,209 18 15,506,184 4 2,852,800 Total Expenses 16 13,763,445

(MVR) 14 2 12 (MVR) 10 Millions - 8 Net Loss Millions 6 (2) (581,409) Net Profit 4 1,742,739 2 -

Demand Demand ADH. OMADHOO 146kW ADH. DHIDHDHOO 65kW

Total Expenses 4 5 4,330,561 Total Expenses Total Income 2,421,486 4 3,152,567 2 Total Income 3 936,979 (MVR) 2 (MVR)

1 - Millions - Millions

(1) (2) Net Loss Net Loss (1,484,507) (2) (1,177,994)

Demand Demand ADH. FENFUSHI 234kW ADH. DHANGETHI 284kW

Total Expenses Total Expenses 5,531,630 Total Income 6 Total Income 6 5,359,586 5,451,500 5 4,410,376 5 4 4 3 (MVR) (MVR) 3 2

Millions 2

Millions 1

- 1 (1) - Net Loss Net Loss (91,914) (2) (1,121,254) (1)

Demand Demand ADH. MANDHOO 76kW V. RAKEEDHOO 39kW

4 Total Expenses 4 2,879,748 Total Expenses 2,458,820 Total Income 1,610,0397 2 2 Total Income 631,532 (MVR) (MVR) -

- Millions Millions

(2) (2) Net Loss Net Loss (2) (1,269,351) (1,827,288

Page 37 Demand AA. MAALHOS Demand AA. HIMANDHOO 212 kW 153 kW

Total Expenses 6 5 4,319,266 Total Income 3,482,989 Total Expenses 4 Total Income 4 3,336,897 2,885,832

3 (MVR) (MVR) 2 2 Millions 1 Millions - -

(1) Net Loss Net Loss (2) (451,065) (2) (836,277)

Demand Demand AA. MATHIVERI 279kW AA. UKULHAS 286kW

Total Expenses Total Expenses 9 Total Income 7 5,839,102 7,900,993 Total Income 8 7,193,823 6 5,018,067 7 5 6 (MVR) 4 (MVR) 5 3 4

Millions 2 3 Millions 1 2 1 - - (1) Net Loss (1) (2) Net Loss (821,035) (2) (707,170)

Demand Demand AA. RASDHOO 495kW AA. THODDOO 451kW

Total Income 14 12,633,277 12 Total Income Total Expenses 9,846,582 12 Total Expenses 9,841,912 9,058,557 10 10 8 (MVR) 8 6 (MVR) 6 Net Profit 3,574,720 Millions 4 4 2 Millions 2 - Net Loss - (2) (4,670)

Demand Demand ADH. KUNBURUDHOO 113kW ADH. DHIGURAH 235kW

Total Expenses Total Expenses 7 6,282,776 3,659,755 Total Income 4 6 5,153,008 3 Total Income 5 2,049,594 4 2 3 1 (MVR) (MVR) 2 - 1 Millions - Millions (1) (1) (2) Net Loss (2) Net Loss (1,610,160) (1,129,768)

Page 38 Demand V. FULIDHOO Demand V. THINADHOO 208kW 158 kW

5 Total Expenses Total Income 3,597,398 6 2,873,409 Total Income Total Expenses 3

5 (MVR) 4,242,623 4,086,812 (MVR) 4

Millions 1

Millions 3 - 2 (1) Net Loss 1 Net Profit (723,989) 155,811 -

V. KEYODHOO Demand Demand 168 kW V.FELIDHOO 190kW

Total Expenses 5 4,134,539 6 4 Total Income Total Income 2,880,783 5 Total Expenses 4,311,508 3 4,058,347 (MVR) 2 4

1 (MVR)

Millions 3 -

Millions 2 (1) Net Loss Net Profit (2) 1 (1,253,755) 253,160

Page 39 CREATING EFFICIENCY & REDUCING COSTS

The business strategy for 2017 was focused on Strategic Decision Making creating efficiency and reducing costs to make the Company sustainable. A Strategic Committee was formed in 2017 with the mandate to assist the management in its The strategies implemented were to ensure that responsibilities related to long-term strategy of the optimum uses of Company resources are the Company. This committee is responsible for embedded in the Company’s decision-making the development and oversight of the processes and day to day operations of the Company’s long-term strategy and Company at every level. implementation.

Further a Technical Advisory Committee was Planning, Monitoring and Forecasting formed to review and advice on major technical decisions of the Company. Existing processes were reviewed to align with our vision and objectives. This involved better planning, monitoring, forecasting, and pooling of resources to reduce costs plus increase the Restructuring the Management productivity of staff without compromising the quality of services. Fuel efficiency, especially in The management of the Company was island powerhouses was gained through restructured to enable the changes necessary strategic use of multiple generators of varying for efficiency gains. Departments were sizes rather than a single generator, which reorganized to enable the implementation and enabled varying the level of power generation execution of the new management strategy. and therefore fuel consumption, based on The functions of departments were redefined, demand at any given time. and the responsibilities of department heads and directors were revised to ensure the As a result of actions taken during the year, objectives were achieved. savings were mainly made on repair & maintenance and logistics costs. Repair & Further, specialized committees were formed to maintenance costs were reduced by 30% while oversee various areas related to operations further significant savings were made on other and staff related matters, namely Emergency operational areas of the Company. Response Committee, Complaints Review Committee, Disciplinary Committee and Furthermore, some of the outsourced services Health, Safety, Security and Environment which were contracted to third parties, were Committee (HSSE). brought in house and repetitive and duplicated services were consolidated in order to reduce costs.

Page 40 BUSINESS DIVERSIFICATION

Being the oldest electric company in the The showroom’s main objective is to ensure the Maldives, matching generation with demand public has access to affordable and quality and giving reliable power is just not enough. electrical products and cables. Making sure our customers use our services in a reliable and safe manner is just as important The showroom’s product range includes all to us. In a globalized world where goods are types of electrical items for residential and ample, differentiating quality and value in commercial use including spare parts and products maybe a challenge. Use of poor components for power generation. Our major quality electrical products and cable may pose products are kWh meters, electrical cables, risks in terms of fire hazards and personal tools, electrical fixtures, solar PV equipment safety. and lights.

STELCO Sales Centre

STELCO Sales Centre which started as a small counter in STELCO Head Office was developed as a full-fledged showroom.

Page 41 Apart from establishment of the sales center as Electrical consultancy services are also a service, it is also considered as a profit provided under the sales center umbrella with oriented business unit to increase the revenue clients in the industrial and resort sector. of STELCO.

QUALITY TESTED AND COMPETITIVE REPUTED PRODUCTS APPROVED PRICING BRANDS

Q u a l i t y o f o u r Products in our Sales Affordable prices are Trusted and branded products assures the Centre are tested and set for our technical electrical tools and p u b l i c h o w w e approved by our and professional accessories in our provide safe and e n g i n e e r s . s e r v i c e s a n d Sales Centre certify affordable products Customers can be equipments. the strength of our and services. a s s u r e d w i t h products. g u a r a n t e e d products.

Distributed Brands

Page 42 Water Production

Since the year 2000, STELCO has been producing water as byproduct of waste heat energy from the engines. The water which is produced through a multi-effect distillation process, is the purest form of water that can be extracted from sea water. The water was mainly used for consumption within STELCO premises but with STELCO’s strategy to foray into new businesses, a water bottling facility was established. Today STELCO FEN is distributed both wholesale and retail throughout Male’.

Four islands under STELCO’s operation, Due to the small scale of the systems, the water Adh.Mahibadhoo, AA.Thoddoo, AA.Ukulhas service business is not a profitable venture but and K.Guraidhoo had water network systems STELCO do so to maintain the service level and established under government projects. will be needing government assistance to STELCO being the utility provider of the islands, sustain this business. the government mandated STELCO to operate and maintain these water network systems.

Bottling Plant

We strive to produce quality drinking water which is affordable compared to alternatives in the market. We produce our bottled water in five different packagings.

Our target is to secure more market share and customer loyalty by providing quality, tasty and safe drinking water to the public.

Page 43 RENEWABLE ENERGY

In order to decrease the dependency on fossil The hybrid system caters for 100% of the fuels and to use clean energy which benefits the island’s power demands during approximately environment, STELCO has successfully eight hours of daytime. An additional 18kWp of implemented several renewable energy solar PV was added to the system in 2017 to projects. Being a tropical country with plenty of optimize the system. This project received sunshine the best fit renewable energy Asian Power Award “Environmental Upgrade of technology has been solar PV. the Year - STELCO Solar Hybrid Power System Project 2017”. With the introduction of net metering, today STELCO has over 1500kWp installed in its V. Keyodhoo Floating Solar PV network with 2 out of its 35 islands Pilot Project (V.Rakeedhoo and ADH.Dhidhoo) having With the possibilities of new technologies as approximately 8 hours of daytime energy well as to introduce innovative solar PV produced by 100% solar PV. solutions to the Maldives, STELCO has conducted a Floating Solar PV pilot project in We are keen on developing more renewable collaboration with 4CSOLAR (USA) a company energy projects, exploring new innovative renown in floating solar technology. The system technologies and are willing to work with was installed in V. Keyodhoo Island, with a potential partners to increase the renewable capacity of 9kWp, which is located in the energy portfolio of STELCO. northwest of the lagoon area. The structure is designed in such a way that the panels are V. Rakeedhoo Solar PV Project directly above the water which provides optimal cooling for the panels, thus enhancing the The solar PV diesel hybrid power system in V. efficiency of the whole system. Rakeedhoo was inaugurated on April 2016, with an installation of 29kWp solar PV and 60kWh battery system. The project was ADH. Dhihdhoo Solar PV Project implemented under the Asian Development Bank’s grant assistance, aimed to increase the A similar project as V. Rakeedhoo’s solar PV usage of renewable energy and minimize the system was implemented with ADB’s grant loss from the diesel generators in small islands. assistance and STELCO’s budget with a capacity of 45kWp solar PV and 90kWh battery The hybrid system was the first of its kind in the system. The project was completed and Maldives, where the battery system stores the commissioned on April 2016 and officially excess solar PV generated and maximizes the inaugurated by the Minister of Environment and usage of renewable energy. Energy, Mr. Thoriq Ibrahim on 5th May 2016.

Page 44 MOVING FORWARD

Future Generation Sources The total cost of this project is estimated to be We aspire to be the leader in low carbon USD 35 Million. technologies in the country through investments in Liquified Natural Gas (LNG) Greater Malé Central Power Station plants, solar PV, battery technologies and hybrid systems. This will further fortify our The Greater Malé Region consisting of existing capabilities and experiences in power Hulhumalé, Hulhulé, Male, Villingili, Gulhifalhu generation to achieve efficiency and reliability. and Thilafushi accounts for more than a quarter of the total installed power generation capacity The current development plans of the of the country. The power demand of the government sees consolidation of the Greater Greater Malé Region is estimated to surpass Male’ landmass as a key sector. In line with this, 260MW by the year 2040. With the STELCO has planned to construct power government’s plan to link the islands of Greater generation facilities in key strategic areas to Male’ region, STELCO has planned to better serve the customer base. capitalize on this opportunity to establish a power station in Thilafushi region. The plan is to construct a 200MW central power station Industrial Village Power Plant operated by LNG. LNG is chosen as the mode With the special developments coming to the of fuel as they are cleaner than the current west side of Male’ such as the Dharumavantha diesel oil and future price fluctuation forecasts Hospital, Hotels and Apartments a dedicated are expected to be lower than diesel.The power power source for the west side of Male’ has produced from the plant will be transmitted via been planned which is integrated with the the national grid and the cost of the project is current network to increase reliability. Planning estimated at approximately USD 500 million. is currently ongoing for the construction of a With the establishment of this mega power 15MW power plant with a 132kV grid station, the existing power station of Malé and substation. Hulhumalé is planned to be used as peaking stations.

Hulhumale’ Phase2 Greater Male’ Central PowerStation Substation & Transmission Grid (Note: Map elements not to scale).

Hulhumale’ Powerplant & Substation

Hulhule’ Proposed 200MW Powerplant Powerplant & Substation & Substation in Thilafushi Gulhifalhu Substation Vilimale’ MIV Male’Powerplant Powerplant & Powerplant & Substation Substation & Substation

Page 45 GRID OF THE FUTURE

In order to ensure that the capacity remains The establishment of the grid will pave the way ahead of customer demand we continue to for alternative energy sources to be expand our generation and distribution incorporated into the power mix at a higher capacity. We factor in growth of existing level. Further this will enable greater digitization customers as well as new customers that and automation of the grid, improving the procure our services as the residential performance and reliability of grid operations population increases, especially in the Greater and delivering greater value to our customers. Malé Region. Many of the projects that began during 2017 will continue for the next two years Hulhumale’ phase 2 is being developed at a and will be completed in the near future. fast pace and to be in line with the developments coming to the area, Housing The connection of Male’, Hulhule’ and Development Corporation (HDC) is developing Hulhumale’ via the Sinamale’ Bridge paved the the distribution network of phase 2 under an way for the interconnection of the individual EPC contract with a foreign party. The project is grids of the islands. This enabled for STELCO to scheduled to be completed in 2019. adopt a transmission voltage of 132kV into the system.

Contract Signing of the Greater Male’ Grid Connection Phase 1

The power interconnection network project named the Greater Male’ Grid Connection Phase 1, was formulated to interconnect the power systems of Male’, Hulhule’ and Hulhumale’ with the construction of grid substations on each island. The cost of the project is USD 44 million and is expected to be completed in mid 2019.

Page 46 AN EFFICIENT FUTURE

Most of the powerhouses were established Achieving Sustainability without much planning as prior to STELCO, the In 2018, loan commitments of additional power houses were run by the island MVR2.5 billion is forecasted. Hence the communities. With the current development of company needs to post a profit of more than the islands such as harbor, water and sewerage MVR 350 million per year to be sustainable. To networks, economic activities of the islands achieve this target some of the measure that have increased rapidly. One specific area that can be taken are as below; has flourished is the tourism sector. Guesthouses are being developed at a fast § A better governance system for pace and demand for power is increasing. sustainability; s Introduction of cost reflective tariff. s Conversion of loans to equity. A program to upgrade the powerhouses of 30 s Subsidizing of loss making islands is underway with the construction of services such as water and standardized powerhouse with dynamic sewerage. generation capacity and better planned s Flexibility in fuel procurement with networks which are in line with the land use duty exemption on fuel and plans of the islands. The project is expected to lubricants. be completed in five years and the target is to § Exploring areas to increase efficiency in make each island an efficient powerhouse and power generation and distribution; a profitable business entity. § Develop human resources; § Restructure the company to better serve the customers; § Develop the powerhouses and INVESTING FOR THE FUTURE networks; Staff training will be an important area of focus for the years ahead to ensure that the Company Our future looks positive and we are committed has staff that is well versed in the latest to move forward with the success we have technology as we expand our capacity and achieved during the year 2017. Cost efficiency methods of power generation and distribution. and increasing our productivity will remain as At the same time, to manage the Company important objectives of the Company to ensure efficiently, the Company will offer training that the Company is sustainable and stand on opportunities to staff in the areas of its own while providing quality services that management and administration, and other meet the needs of the country. relevant areas. Moreover, the Company plans to offer ten scholarships in technical areas for higher education during 2018 to develop and strengthen the technical capacity of the Company.

Page 47 AUDITED FINANCIAL STATEMENTS 2017

COMPANY CONTACTS

Malé Powerhouse AA. Bodufolhudhoo Powerhouse ADH. Mahibadhoo Powerhouse Phone: 332 0982 Contact: 798-6749 Contact: 966-7796 Fax: 332 0736 E-mail Address: E-mail Address: Email:[email protected] [email protected] [email protected] Website: www.stelco.com.mv Customer Services: 331 4949 AA. Mathiveri Powerhouse ADH. Dhangethi Powerhouse Fault Reports: 104 Contact: 795-0236 Contact: 797 1141 | 797 1142 E-mail Address: [email protected] E-mail Address: [email protected] K. Villingili Powerhouse Contact: 339-0688 AA. Feridhoo Powerhouse ADH. Mandhoo Powerhouse E-mail Address: [email protected] Contact: 797-8046 Contact: 792-0407 E-mail Address: [email protected] E-mail Address: [email protected] K. Gulhifalhu Powerhouse Contact: 799 3042 AA. Maalhos Powerhouse V. Thinadhoo Powerhouse E-mail Address: [email protected] Contact: 779-9145 Contact: 779-9160 E-mail Address: [email protected] E-mail Address: [email protected] K. Thilafushi Powerhouse Contact: 790 0178 AA. Himandhoo Powerhouse V. Rakeedhoo Powerhouse E-mail Address: [email protected] Contact: 795-2348 Contact: 779-9149 E-mail Address: E-mail Address: [email protected] K. Dhiffushi Powerhouse [email protected] Contact: 790 6641 V. Fulidhoo Powerhouse E-mail Address: [email protected] AA. Thoddoo Powerhouse Contact: 796-6039 Contact: 911-8490 E-mail Address: [email protected] K. Gaafaru Powerhouse E-mail Address: [email protected] Contact: 779-9150 V. Keyodhoo Powerhouse E-mail Address: [email protected] AA. Rasdhoo Powerhouse Contact: 790 6642 Contact: 979-0405 E-mail Address: [email protected] K. Gulhi Powerhouse E-mail Address: [email protected] Contact: 779-9154 V. Felidhoo Powerhouse E-mail Address: [email protected] ADH. Omadhoo Powerhouse Contact: 792-5194 Contact: 796-0280 E-mail Address: [email protected] K. Guraidhoo Powerhouse E-mail Address: [email protected] Contact: 664-4235 E-mail Address: [email protected] ADH. Kumburudhoo Powerhouse Contact: 790 6643 K. Himmafushi Powerhouse E-mail Address: Contact: 664-0311 [email protected] E-mail Address: [email protected] ADH. Dhigurah Powerhouse K. Kaashidhoo Powerhouse Contact: 790 6640 Contact: 664-0141 E-mail Address: [email protected] E-mail Address: [email protected] ADH. Dhidhdhoo Powerhouse Contact: 796-0433 K. Maafushi Powerhouse E-mail Address: Contact: 664-0002 / 664-0002 [email protected] E-mail Address: [email protected] ADH. Fenfushi Powerhouse K. Thulusdhoo Powerhouse Contact: 793-0127 Contact: 664-0029 E-mail Address: [email protected] E-mail Address: [email protected] ADH. Hangnameedhoo Powerhouse AA. Ukulhas Powerhouse Contact: 966-8660 Contact: 799-3048 E-mail Address: E-mail Address: [email protected] [email protected] ST w T Ameenee el: eb: A (960) TE www ELECTRIC 332 .st Magu, elco.com.mv 0982, P .O F Bo ax: C OMP x (960) 2184, ANY 332 Male’ 7036 LIMITED , 20349, Email: R epublic admin@st o f elco.com.mv Maldiv es

STATE ELECTRIC COMPANY LIMITED 2017 ANNUAL REPORT