Dubai-based Emirates Central Cooling Systems Corporation, better known as Empower, signed an agreement to acquire the district cooling assets of property developer Nakheel in a deal valued at Dh860 million ($234m).
Under the terms of the agreement, Empower will acquire all the assets of Nakheel’s district cooling systems that serve more than 18,000 customers in 17 major urban projects through 19 plants across Dubai, the company said on Monday.
Empower will also manage and operate the district cooling systems.
Empower's acquisition of Nakheel's cooling systems reflects the booming business environment in Dubai and the growth in number and type of acquisition deals, said Sheikh Ahmed bin Saeed, chairman of the Dubai Supreme Council of Energy.
District cooling companies deliver chilled water through insulated pipes to offices, residences and industrial buildings.
Other developers have struck similar deals over the last few months. In April, Emaar Properties, Dubai's largest developer, sold its Downtown Dubai district cooling business for Dh2.48 billion to Dubai’s Tabreed.
Tabreed also bought two district cooling units on Saadiyat Island from Aldar Properties for Dh963m, in December.
Empower will finance the acquisition deal through a mix of the company’s funds and backing from local and international banks, chief executive Ahmad bin Shafar said.
The deal will further diversify Empower’s portfolio, which will include The Gardens, Nakheel Mall, Dragon Mart, Jumeirah Islands, Souk Al Marfa on the Deira Islands, The Circle Mall, Al Khail Avenue Mall and others, he said.
Nakheel's sale of its district cooling assets is a "strategic move" that allows the developer to focus on its core business and improve the services it provides to investors, residents, business partners and customers at its communities and retail destinations in Dubai, said Mohammed Al Shaibani, chairman of Nakheel.
The acquisition is also in line with Dubai's sustainable development goals, according to Saeed Al Tayer, chairman of Empower's board of directors.
Dubai's industrial sectors are "quite rich with investment opportunities and are definitely able to permanently develop and expand the scope of investment activities that relate to the present and future of the vital district cooling sector", he said.
"We are keen that the deal would give thrust to improving the efficiency of the energy sector."