National Central Cooling Company PJSC (DFM: Tabreed) has officially confirmed its significant strategic partnership with the International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets. Since its establishment in 1956, IFC has invested more than $321 billion in emerging markets.
This development will see ownership of Tabreed India, currently a wholly owned subsidiary of Tabreed, transferred to Tabreed Asia Central Cooling Company Pte Limited, a new holding company established in Singapore, as announced on 3 March 2021. Tabreed Asia will be 75% owned by Tabreed and 25% owned by IFC with a mandate to develop projects of up to $400 million over the next five years, targeting a portfolio of approximately 100,000 refrigeration tonnes (RT), servicing industrial, commercial, and retail developments across India.
“We’re excited about our partnership with IFC and look forward to working together to develop district cooling and cooling-as-a-service in India. We are committed to providing efficient cooling to cities and have been actively supporting the initiatives undertaken by the Government. In parallel, we have engaged with several top tier real estate developers to evaluate project opportunities focusing on specific micro-markets in 6 key cities in the country. With this partnership, we aim to build on Tabreed’s ongoing activities in India, to provide more energy-efficient, end-to-end cooling solutions through an outsourced utility model for real estate developments, new urban masterplans, and ongoing redevelopments,” said Sudheer Perla, Country Manager – India, Tabreed.
Both IFC and Tabreed have agreed on an investment eligibility criteria which, beyond typical financial requirements, also includes a robust environmental, social and governance (ESG) framework that will be adopted while developing district energy projects in these geographies. With such capital-intensive infrastructure requirements, the intention will be to raise debt through project finance for individual projects.
In terms of status, both parties have agreed on the mechanics to transfer Tabreed’s existing India operations under this joint venture and are looking to ramp up teams on the ground to continue developing value accretive opportunities in India.
“As temperatures are rising, access to cooling is a major development challenge, especially in emerging economies located in the tropical climate zone. This district cooling project is at the heart of what IFC is all about,” said Makhtar Diop, IFC’s Managing Director. “By working with Tabreed, we will bring sustainable, innovative and much needed cooling solutions to India.”
District cooling has been identified as an important intervention area around which several government bodies and smart cities are now increasingly evaluating its incorporation into urban master planning. With a currently low per capita cooling consumption and a rapidly growing cooling market across all sectors, district cooling adoption is imperative for India to meet its ambitious climate goals. There have been a number of promising developments on the policy and regulatory front, including India being the first country in the world to announce a Cooling Action Plan to more holistically address how increasing demand for cooling and energy efficiency can be met more sustainably.
Khalid Abdullah al Marzooqi, CEO of Tabreed, said this is a positive and timely development for Tabreed in India. “IFC has been established in this region for many decades,” he remarked, “unlocking investment opportunities, strengthening clients’ performance and impact, as well as improving environmental, social and governance (ESG) standards. It makes perfect sense for us to join forces as we are able to lean on each other’s unrivalled expertise.”
“India is strategically very important for us, with demand for energy growing faster there than anywhere else in the world right now. District cooling uses, on average, half the power consumed by conventional cooling methods, meaning it’s an essential part of many countries’ climate goals due to the enormous savings in CO2 emissions achieved through energy efficiency. For countries such as India, reliable cooling means industrial, agricultural and societal progress, and we eagerly look forward to making a meaningful contribution to its prosperity while ensuring the sustainability we know is vital to all our futures.”
For more updates from Tabreed, visit www.tabreed.ae