Tabreed forms new holding company with World Bank's IFC to expand in India

The entities will commit an initial equity of $100m, with a mandate to invest in projects of up to $400m over the next five years

IFC and Tabreed outlined investment eligibility criteria that include environmental, social and corporate governance requirements. Photo: Reuters

Abu Dhabi's National Central Cooling Company, known as Tabreed, is partnering with the International Finance Corporation to expand in India through a jointly owned new holding company.

Under the partnership, ownership of Tabreed India will be transferred to a new holding company established in Singapore, in which Tabreed will hold a 75 per cent stake and IFC the remaining 25 per cent, Tabreed said in a statement on Monday to the Dubai Financial Market, where its shares trade.

IFC is a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets.

The partners will commit an initial equity of $100 million, with a mandate to invest in projects of up to $400m over the next five years, targeting a portfolio of approximately 100,000 refrigeration tonnes servicing industrial, commercial and retail developments across India.

"India is strategically very important for us, with demand for energy growing faster there than anywhere else in the world right now," said Khalid Al Marzooqi, chief executive of Tabreed. "For countries such as India, reliable cooling means industrial, agricultural and societal progress."

Last month, Mr Al Marzooqi told The National that Tabreed will be looking at growth opportunities in different markets including India, Egypt, the UAE and Saudi Arabia. Tabreed currently owns and operates 84 plants across the GCC, including 75 in the UAE, three in Saudi Arabia, five in Oman and one in Bahrain.

District cooling on average uses half the power consumed by conventional cooling methods, making it an essential part of many countries’ climate goals due to the major savings in carbon dioxide emissions made through energy efficiency, the chief executive said.

IFC and Tabreed outlined investment eligibility criteria that include environmental, social, and corporate governance requirements for their projects. IFC will make public environment and sustainability disclosures before investing in each project, according to the statement.

“As temperatures are rising, access to cooling is a major development challenge, especially in emerging economies located in the tropical climate zone,” Makhtar Diop, IFC's managing director, said. “By working with Tabreed, we will bring sustainable, innovative and much-needed cooling solutions to India and other parts of Asia.”

India, the partnership’s key target market, has low per capita cooling consumption and a rapidly growing cooling market across all sectors, with district cooling adoption becoming crucial for the South Asian country to meet its ambitious climate goals, Tabreed said.

India has set a target of achieving carbon neutrality by 2070, giving the drive to transition to cleaner forms of energy a new impetus.

Tabreed said that there have been a number of "promising" policy and regulatory developments in India, including the announcement of a Cooling Action Plan to facilitate sustainable growth in cooling demand for the country, with district cooling identified as an important intervention area.

"As a result, several Indian government bodies and smart cities are now increasingly evaluating the incorporation of district cooling into urban master planning," the company said. "Tabreed has been actively supporting these initiatives and engaging with several top-tier real estate developers across the country to evaluate project opportunities."

Tabreed has finalised a number of deals in the UAE over the past 12 months.

Earlier this year, it took full ownership of the operator of the district cooling unit that serves Al Maryah Island in Abu Dhabi after it bought an additional 50 per cent stake for Dh311.5m ($84.8m).

Tabreed also acquired an additional stake in Al Wajeez Development Company from its joint venture partner, Mubadala Infrastructure Partners, it said in August.

It bought an 80 per cent stake in Emaar’s Downtown Dubai district cooling network and also acquired Aldar’s Saadiyat Island plant and the Masdar City district cooling plant in Abu Dhabi to boost its portfolio.