Dubai: Abu Dhabi’s district cooling company Tabreed can call in up to another $500 million in debt funding to fuel growth – both in the UAE and outside, according to the CEO.
“We have the capacity on call to raise more funds to drive growth,” said Bader Saeed Al Lakmi, CEO. “We have become the partner of choice to cool infrastructure projects in the country. We can do the same beyond the GCC – it’s something we are quite keen to.”
Mixing debt to pick up assets is a strategy that paid off spectacularly for Tabreed in 2020. That bought it two of the biggest district cooling assets in the country.
In April last year, Tabreed acquired 80 per cent stake in the entity that cools Downtown Dubai, with Emaar holding the balance 20 per cent, and later in the year bought the cooling assets at Saadiyat Island from Aldar Properties. The two deals cost Tabreed Dh2.48 billion and Dh963 million, respectively.
“For the Aldar deal, we used part of $500 million we raised earlier,” the CEO said. “And that with Emaar was fully syndicated, at $692 million, but that was struck much earlier. So, effectively, we could still raise another $500 million via debt. When we should do that isn’t decided.”
Tabreed, which also bought the district cooling assets at Masdar City early 2020, has no plans to acquire the 20 per cent held by Emaar at the Downtown. “We have a long-term partnership with Emaar – I would love to have that extended for the longest possible time, even partnering outside of the Downtown.”
There are more than 70 buildings at the Downtown, which also is the world’s largest district cooling scheme. “We save 190,000 tonnes of CO2 annually and that’s equivalent to taking out 41,000 cars off the roads,” he added. (On Sunday, Tabreed lighted up the Burj Khalifa as part of a new rebranding exercise, under the theme ‘Essential for Progress’).
Tabreed shareholders have approved a cash dividend of 5.75 fils per share and bonus shares of one share for every existing 45 shares for 2020. This equates to around 11.5 fils for each share at the current share price and a 10% increase on 2019 dividend.
On the overseas side, Tabreed’s priorities are to get things rolling in Egypt and India. “We definitely view them as major potential markets for us, and need to have likeminded partners there,” added Al Lakmi. “We are open to whatever business model that would achieve our ambitions. We will leave the strategy open.
“In India, where we opened an office in Delhi in 2019, we have boots on the ground and engaging with many stakeholders at the state or federal level. There are a number of projects in the pipeline, in different stages. But nothing that has reached the final stage of investment decisions. But I am hopeful we will achieve some deals this year.”