Tabreed teams up with Netherlands' CVC DIF to buy Abu Dhabi’s PAL Cooling in $1bn deal

The companies are acquiring PAL’s portfolio in Abu Dhabi main island area and Al Reem Island

A Tabreed chiller plant in Abu Dhabi. The company is expanding its operations. Khushnum Bhandari / The National

The UAE's National Central Cooling Company − also known as Tabreed − is boosting its presence in the country by teaming up with Netherlands-based fund CVC DIF to acquire Abu Dhabi’s PAL Cooling in a Dh3.8 billion ($1.03 billion) deal.

As part of the deal, the two companies will acquire PAL’s existing portfolio that includes eight long-term concessions − three in Abu Dhabi's main island area and five in Al Reem Island −Tabreed said in a statement on Monday to the Dubai Financial Market, where its shares are traded.

The concessions are serviced by five existing district cooling plants and associated networks in Abu Dhabi, with connected capacity of 182,000 refrigeration tonnes, as of December 2024.

An additional plant is also under construction currently and three more are in the planning phase.

PAL has concession agreements with major developers, including Aldar Properties, Modon and Imkan to provide cooling services.

This deal is subject to customary regulatory approvals.

The acquisition is part of Tabreed's plans “to adapt to Abu Dhabi's ambitious real estate projects”, Bakheet Al Katheeri, chairman of Tabreed, said.

“This year has been historic for Tabreed, with ventures like our Palm Jebel Ali JV and continued growth in Abu Dhabi. These steps position us to meet the UAE’s rising demand for sustainable cooling, driven by population growth and decarbonisation targets,” added Mr Al Katheeri.

PAL Cooling’s existing portfolio includes eight long-term concessions. Photo: Handout

In March, Tabreed and Dubai Holding Investments entered a concession agreement to set up a joint venture to provide district cooling services for Palm Jebel Ali in Dubai.

The construction of the district cooling network is set to commence in the second quarter of 2025, it said previously. The first cooling services at the project are expected to be delivered by 2027.

Tabreed also bought a majority stake in Emaar Properties' Downtown Dubai district cooling business for Dh2.48 billion in 2021.

It is providing district cooling services to developments such as the Burj Khalifa, Sheikh Zayed Grand Mosque, Louvre Abu Dhabi, Ferrari World, Emirates Towers, Yas Island, and Dubai Metro, among others.

The company owns and operates 92 plants − 76 in the UAE, five in Saudi Arabia, eight in Oman, plus one each in Bahrain, India and Egypt − in addition to other international projects and operations.

CVC DIF is a global mid-market infrastructure equity fund manager with €19 billion ($22.3 billion) of infrastructure assets under management in energy transition, transport, utilities and digitalisation.

It is part of CVC, a global private markets manager with €202 billion of assets under management.

PAL Cooling Holding, which was founded in 2006, was acquired by Multiply Group in July 2021. Since then, it has been integrated under Multiply's energy and utilities vertical.

The sale process of PAL “attracted strong interest from numerous strategic and financial investors given the UAE’s rapid real estate development and rising demand for district cooling infrastructure”, Multiply said in a separate statement.

The deal “reflects our ability to realise significant value from our assets while enhancing liquidity to fuel Multiply Group’s next phase of growth – both across our core verticals and on the global stage”, Samia Bouazza, group chief executive and managing director of Multiply Group, said.