ABU DHABI, UAE: National Central Cooling Company (Tabreed) has finalised a significant strategic partnership with the International Finance Corporation (IFC), under which ownership of Tabreed India, currently a wholly owned subsidiary of Tabreed, being transferred to a new holding company established in Singapore to be jointly owned by Tabreed (75%) and IFC (25%).
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.
The holding company will be established with initial equity commitments from the partners of US$100 million with a mandate to invest in projects of up to approximately $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.
IFC and Tabreed have agreed investment eligibility criteria which include robust environmental, social, and corporate governance (ESG) requirements for projects in these geographies. Public environment and sustainability (E&S) disclosures will be made by IFC prior to investing in each project.
India, the partnership’s key target market, has low per capita cooling consumption and a rapidly growing cooling market across all sectors, and district cooling adoption is imperative for India to meet its ambitious climate goals.
There have been a number of promising policy and regulatory developments in India, including the groundbreaking announcement of a Cooling Action Plan to facilitate sustainable growth in cooling demand for the nation, with district cooling being identified as an important intervention area.
As a result, several Indian government bodies and smart cities are now increasingly evaluating the incorporation of district cooling into urban master planning. Tabreed has been actively supporting these initiatives and engaging with several top tier real estate developers across the country to evaluate project opportunities.
“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 and other parts of Asia.”
Khalid Abdulla Al Marzooqi, CEO of Tabreed, said: “This is a positive and timely development for Tabreed. IFC has been established in this region for many decades, 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.”