The National Central Cooling Company, better known as Tabreed, is investing Dh44.34 million ($12.1 million) in an information technology park in northern India amid its global expansion efforts.
Through the investment, Tabreed will acquire the existing cooling infrastructure at Tata Realty’s Intellion Park development in Gurugram, the company said on Tuesday.
The initial value of the transaction will be Dh9.4 billion, it said in a filing to the Dubai Financial Market, where its shares are traded.
Additional investment will be required as the UAE company boosts capacity to meet the rising demand for cooling services in the special economic zone, which covers a total area of 325,160 square metres, it said.
Special economic zones are areas designated for industrial and export purposes, where taxes are waived.
“As the world’s most populous country and one of the fastest-growing economies, India will be a key strategic market and important partner for Tabreed as we expand our international presence,” said Tabreed chairman Khaled Al Qubaisi.
“We expect to see large-scale adoption of district cooling in India as demand for real estate and cooling grows at a rapid pace.”
Tabreed is bullish about growth in India and is looking at acquisitions and greenfield projects to expand in Asia’s third-largest economy.
In 2021, the company formed a new holding company with the World Bank’s International Finance Corporation (IFC) to invest up to $400 million in the next five years for the purpose of its expansion in India.
Cooling demand across India is projected to rise at a rate of 15 per cent to 20 per cent annually while aggregated cooling demand will grow by about eight times by 2037 to 2038, as compared to the 2017 to 2018 baseline, the World Bank said in a report last year, citing the India Cooling Action Plan.
“This means there will be a demand for a new air-conditioner every 15 seconds,” the Washington-based lender said in the November report.
The Tata Sons subsidiary’s deal with Tabreed launches the “cooling-as-a-service” market in India and is a “pivotal” event, said Sanjay Dutt, managing director and chief executive of Tata Realty.
This will enable the “delivery of superior value to occupants, while promoting higher standards of ESG [environment, social and governance] and wellness in commercial and mixed-use real estate developments”, he said.
Founded in 1998, Tabreed owns and operates 86 district cooling plants across the GCC, including 75 in the UAE, three in Saudi Arabia, seven in Oman and one in Bahrain, in addition to other international projects and operations.
The company does not expect the deal to “materially” affect its financial results.
It reported a 168 per cent annual surge in its first-quarter net profit as revenue rose on the back of new customer connections and higher consumption.
Revenue during the period rose 10 per cent year on year to Dh464 million.
Tabreed added 12,000 refrigerated tonnes of new customer connections during the quarter in the UAE and Oman, increasing its total connected capacity to 1.276 million RT.
