The National Central Cooling Company, better known as Tabreed, has been confirmed as the preferred bidder for a long-term district cooling concession at the Hyderabad Pharma City master plan in India.
Hyderabad Pharma City is being developed as one of the world’s largest integrated clusters for the pharmaceutical industry.
Phase one will feature the construction of 2,500 refrigeration tonnes (RT) of district cooling capacity at an estimated cost of Dh36.2 million ($9.9 million), Tabreed said on Monday in a filing to the Dubai Financial Market, where its shares are traded.
The project will be expanded in phases as cooling demand rises, and is expected to reach a total concession load of 125,000 RT.
Tabreed was selected as the preferred bidder by the Telangana State Industrial Infrastructure Corporation, with an obligation to execute a concession agreement.
The UAE company will provide chilled water services to the development in Hyderabad, in the south-central Indian state of Telangana.
“Assets to be developed will support Tabreed’s growth plans in India. We do not expect this transaction will materially impact Tabreed’s existing operations or the rights of its shareholders,” the company said.
Hyderabad Pharma City is one of world's largest integrated clusters for pharmaceutical research and development and manufacturing, according to its website.
Located about 25km from Hyderabad International Airport, the project is a platform for companies in the life sciences sector.
It is expected to attract investments worth $9.7 billion and create 560,000 jobs, according to the website.
Tabreed's selection as the preferred bidder on the Indian project comes at a time when it is expanding globally.
The company said in May it was investing Dh44.34 million in an information technology park in north India.
“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,” chairman Khaled Al Qubaisi said at the time.
“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 optimistic 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 holding company with the World Bank’s International Finance Corporation to invest up to $400 million over 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 expand by about eight times from 2037 to 2038, as compared to the 2017-2018 baseline, the World Bank said in a report last year, citing the India Cooling Action Plan.
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.
Tabreed said that the first phase of the Hyderabad Pharma City project would have a funding mix of 75 per cent local financing and 25 per cent equity funding, paid in line with construction milestones.
“Additional investment will be required to fund construction of additional cooling infrastructure in line with project requirements as needed to meet demands,” it said in the filing on Monday.
The deal is set to close in the fourth quarter of 2023, with construction work expected to start “as soon as possible”, Tabreed said.
