Energy City Qatar is the first ever integrated energy hub in the GCC and MENA regions created to enhance the Gulf region’s ability to capture critical revenue streams from hydrocarbons and to act as a nucleus for the core elements of Middle East’s ever growing oil and gas industry. Its success led to the creation of sister cities in Africa and Asia – all under the active participation and contribution of Eng. Hesham Ismaeel AbdulRahman Al-Emadi, the chief executive officer.
Right from day zero to the conceptualisation, planning and implementation stages, the project has seen a lot of ups and downs, but with Eng. Al-Emadi’s rich experience – ability to source out prime quality investments and successfully restructure them and his know-how and expertise in financing, investment negotiation, among other skills – the project successfully rode the waves. Eng. Al-Emadi tells bq about his journey over the last ten years, how the project has progressed and their future and expansion plans as well.
Lack of a central hub to bring together all the major players in the energy city has given impetus to the ambitious Energy City Qatar project, spearheaded by Al-Emadi. After joining in late 2006, he made several changes and a couple of restructuring attempts later, the ECQ nears completion with almost 100 percent of the infrastructure works finished and over 25 companies ready for operation with functional headquarters.
Qatar is ideally placed to host the Middle East’s energy hub and has the necessary expertise in the field. With a vested interest in ensuring that Energy City Qatar leads the way in global hydrocarbon development, the project is strategically located in the new waterfront city of Lusail, North of Doha. Expected to be completed soon, the USD 3 bn development project will contain two marinas, residential areas, commercial districts, two golf courses, an entertainment district, shopping malls, mosques, schools and medical centers.
ECQ 1 will consist of 92 corporate buildings, able to house approximately 20,000 people. The land plot extends to a total area approximately 721,584 sq. m and the site topography is generally flat. The plots of land range from 2,627 sq. m to 25,067 sq. m. The vast majority of the plots have planning consent for corporate offices premises. Companies like ExxonMobil, Total, QNB, Al Rayan Bank and many more have already signed on with ECQ. Utilizing the latest environmental building technology, Energy City boasts a diverse mix of energy-related companies, commercial tenants, customers and suppliers.
Eng. Al Emadi reveals more in a candid interview with bq.
Could you tell us more about the progress and current status of the Energy City Qatar (ECQ) project?
We expect the city to launch and begin operations within the next 5 years. It is likely that executive works for construction will be completed in the next three years including infrastructure work. We have completed nearly 100 percent of infrastructure, and are ready for development. Many of the developers have started construction works. We expect 70 percent of administrative buildings and corporate headquarters to be executed in the coming period. Currently, we are focusing our efforts on removing all obstacles limiting the progress of project execution and on staying committed to delivery dates.
Tell us more about the unique features of this project?
Energy City is the first Qatari project that implements green and sustainable building practices. The city has obtained certification from the Qatar Sustainability Assessment System (QSAS) and a golden certificate in Leadership in Energy and Environmental Design (LEED), which encourage enterprises to use eco-friendly and sustainable energy sources in buildings. Energy City was also the first real estate development company to sign a memorandum of understanding with Qatar Solar to source solar panels.
The first designs for Energy and Business City factored in producing around 6 megawatts from solar energy. The company is seeking, in collaboration with Qatar Solar, to increase this figure to 9 megawatts, or 15 percent of the energy consumed in the entire project. Energy and Business City is an environment providing advanced IT and communications services for various stakeholders, be it investors, clients or visitors. They will be able to reach any application at any time and place, and control multiple functions by swiping on a tablet or pressing a button. The IT is highly advanced and is a major element of the project.
The city is smart, efficient and green and we have focused on the quality of the buildings and infrastructure. The smart city is working on developing a strategy of IT and communications to provide integrated solutions through a single platform, to meet the demands of administration, monitoring, execution, management and control of all the systems and applications of the smart city. The city also has smart traffic systems controlled by a central unit, achieving smooth and easy transportation in the city.
What is the total estimated value of the entire project? What are the advantages of this project and what are the facilities available?
The project offers major advantages for developers. It is a low-density business hub that takes into account environmental standards. It is a business park for various companies in all sectors. It provides all services companies need, from facilities to logistics to hotels and so on. The combination of developers and tenants in the city will add another mix of banks, insurance, retail, construction, energy and other service providers.
Adding more retail functions into the city will make it more diversified and that mixture will have lots of value for the companies to be present there in a better business environment. The City has a large number of parking facilities, and is therefore an integrated commercial zone that is the first of its kind in Qatar. The total cost of the project is around USD 3 billion.
Did the 2008 crisis affect the project? How did the management deal with it?
We restructured payments of the sub-developers. We negotiated with the banks for longer-term loans and re worked the investor payments in order to convince them to stay and pay. We also opened the project to other sectors and became less restricted in terms of opening to more sub developers. This move added value to the project, with the prices significantly increasing and new players attracted to the project. We also made the investors direct shareholders of the company.
Do you have any plans to float an IPO in the near future?
We will need at least two or three more years for that. The recent restructuring that we did involved diversification of our investments and moving them out of ECQ and even Qatar. We are leveraging our real estate development know how.
If we wanted to have an IPO, it wouldn’t be for energy city. We will have to regroup, create a new brand and then have an IPO for that brand – a new holding company.
This will be better for us since we already have an established number of downstream sub-investment companies that are investing in other sectors, countries and projects besides ECQ.
What dictates the land prices in ECQ?
ECQ prices are currently dictated by demand supply mechanics and although the plots are fully sold out, international players do have the opportunity to purchase from existing owners. Towards projection completion, the prices are bound to increase further.
Do you see the oil price volatility affecting real estate prices in Qatar?
The current oil price volatility will have no bearing on the local real estate market. If the oil prices stay low for long time, it will affect real estate. But if it’s going to rebound and it’s only a three to six month drop, there won’t really be any effects. If it stays between USD 70 to USD 100, we will be okay.
If it averages between USD 50 and USD 60 for a long time, we will gradually see effects in all sectors. If it averages between USD 75 and USD 95, it won’t particularly affect businesses and real estate. The real estate market usually takes longer to show such effects. Transactions did decrease a little bit, but now it’s moving again. If there are major effects, they will mostly be in the commercial sector. I foresee a major challenge in the retail sector with a lot of malls coming to the market at the same time.
How many companies are expected to be a part of ECQ? Which are those companies? How many jobs are expected to be created via this project?
We are expecting between 100 and 200 companies to be present at ECQ. Several companies have signed on with us including ExxonMobil, Total, QNB, Al Rayan Bank, Doha Bank, Petrotec, Tadmur Logistics, HBK Contracting Co. and many more. This project is expected to generate over 25,000 jobs.
What are your expansion plans and other future initiatives?
With several expansion plans and development underway in the project, we intend to leverage our experience from ECQ over the last ten years. We are looking at some big projects in the UAE, Saudi Arabia and Qatar as well. We already invested in some of the projects but we are working on developing these mega projects, in the next couple of months. There are some MoUs and negotiations currently happening with government institutions to develop new concepts inspired by ECQ, but different models.