7.37 PM Friday, 29 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:56 06:10 12:26 15:53 18:37 19:52
29 March 2024

Tabreed raises funds for Gulf expansion

Published
By Staff Writer

(SUPPLIED)

 
The UAE-based National Central Cooling Company, or Tabreed, is in advanced talks with banks to raise a Dh1 billion syndicated loan to finance a massive expansion in the Gulf.

“Financing our expansion will be through bank funding and Islamic bonds but we are open to all options. We are in talks with some financial institutions,” Chief Executive Dany Safi said.

A bank official close to the deal told Emirates Business Tabreed is in advanced talks with some institutions to conclude a syndicated loan. Safi said in an interview that Tabreed will build cooling plants in Saudi Arabia, Kuwait and Oman, investing between $5bn (Dh18.3bn) and $7bn (Dh25.6bn) over the next five years as demand surges in the region on the back of a real estate boom and population growth.

“We plan to build new cooling plants in the UAE and in neighbouring Gulf countries such as Saudi Arabia, Kuwait and Oman,” Safi said. “Demand for cooling plants is rising at more than 50 per cent in the UAE and we are seeing similar or higher growth rates in this region mainly due to the huge real estate developments as well as the growth in population,” he addedi.

Tabreed has 25 cooling plants operating in the UAE with a capacity of about 375,000 refrigerated tonnes (RT). At least 15 more cooling plants are under construction in the UAE. These will come on stream over the next three years, starting from this year.

“We are building our first cooling plant in Saudi Arabia.   The plant will have a capacity of 40,000 RT and the investment outlay is SAR200 million (Dh197m). It will be ready in early 2009.” Tabreed is also in advanced discussions to build cooling plants in Kuwait and Oman, he said. “We have set up joint venture companies in Kuwait and Oman and we have reached an advanced stage in our talks with partners to build plants there.

“Within two or three years we will be present in all the Gulf states,” he added.

Tabreed operates three plants in Qatar and two in Bahrain with local partners.

“There’s growth potential in Jordan also. Our first plant is under construction now. It will be ready by the end of next year with a capacity for 50,000 RT, going up to 85,000 RT,” Safi said.

The company plans to finance its massive projects through bank borrowing and selling sukuk, or Shariah-compliant bonds.

“Local, regional and international banks are involved in this deal,” said a senior banker close to the deal. Tabreed could also sell convertible bonds early next year. Talks are going on.

Tabreed, established in 1998, operates district cooling plants powered by gas or electricity from the local grid to residential, industrial and commercial properties. Tabreed provides its services throughout the GCC, with offices in Dubai, Abu Dhabi, Ras Al Khaimah, Doha, Manama and Muscat.

The company signed an agreement with Abu Dhabi-based Aldar Properties in March to build 25 new district cooling plants in the capital worth Dh11bn. The venture will be known as A&T Cool and its plants will be capable of generating a total cooling capacity of around one million tonnes of refrigeration by 2012.

The plants will provide cooling for all Aldar developments, including Central Market, Al Raha Gardens, Al Raha Beach and Yas Island.

Revenue of the firm grew by 104 per cent last year and assets by 57 per cent.


At the end of 2006, Tabreed was providing cooling services to 473 buildings covering a total of 149.9 million square feet.