Dubai-based Emirates District Cooling Company (Emicool) is planning to invest more than half a billion dirhams as it expands globally, with particular interest in entering the vast Indian market.
Later this year, Emicool is expected to launch a new company, Emicool District Cooling Global, with a total capital of AED 600 million (USD 163.3 million) to cater to international markets, a source familiar with the project told Zawya.
"Emicool has already been prequalified to set up a plant in India's New Okhla Industrial Development Area [Noida]," he disclosed. "It is a huge promising market and Emicool will be doing well there," he said.
Dubbed the IT capital of India's National Capital Region (NCR), Noida - located about 20 kilometers southeast of New Delhi - is a major industrial hub. Due to space scarcity in Delhi, a new real estate boom is expected in Noida, with land prices climbing by as much as 30% recently, according to latest reports.
The source disclosed that Emicool will also venture into Qatar, Saudi Arabia and Bahrain, where it is investing in excess of AED 100 million (USD 27.2 million) for a district cooling plant.
Established in 2003 with head office in Dubai Investment Park and a branch in Dubai Motor City, Emicool is a joint venture between Dubai Investments and Union Properties.
District cooling companies such as Emicool uses a central production point to provide air conditioning service by feeding chilled air into commercial and residential buildings. In a report published in July 2012, Booz & Co. said district cooling can play an important role in the GCC, where air conditioning is an expensive necessity.
Analysts at Booz said that if the sector reaches its full potential, it could provide around 30% of the region's forecast cooling needs by 2030. In addition, it has the potential to cut region-wide carbon emissions by 31 million tons per year, reduce new power capacity requirements regionally by 20 gigawatts (equivalent to 10 large power plants) and slash GCC's fuel consumption for power plants by 200,000 barrels of oil equivalent per day.
TAPPING SHARIAH FOR FUNDS
In 2012, Emicool signed a AED 793 million (USD 216 million) Islamic loan guaranteed by both parent companies. Structured in a Shariah-compliant manner, the loan facility will run for 10 years, according to Mashreq Bank, one of the finance providers.
The money will be used to refinance a AED 668 million (USD182 million) bridge loan and other facilities raised with banks on an individual basis, as the company sought funding for the construction of cooling plants in Dubai Motor City and Dubai Investment Park.
The loan will also help the company realize its long-term expansion goals including investing in infrastructure. All seven banks, which participated in the original bridge loan, have signed up to the new transaction as well.
Emicool currently has 10 strategically located district cooling operational plants in Dubai, with capacity in excess of 330,800 refrigeration ton (RT), including reticulation pipe network and energy transfer stations.
It currently serves around 12,000 customers located at the Green Community Development, Investments Park, Dubai Motor City, Dubai Sports City and Uptown Mirdiff - areas where it has monopoly on district cooling services.
Using innovative processes and technologies (similar to those applied in Malaysia's Petronas Towers), Emicool provides an efficient and a cost-effective alternative to conventional cooling systems. Since its entry into the regional district cooling sector in 2003, Emicool has gained accolades from its peers.
In May this year, it was awarded the Dubai Chamber Corporate Social Responsibility (CSR) Label, a standard certification given by the Centre for Responsible Business under the Dubai Chamber of Commerce and Industry.
Last year, the company was recognized 'Best District Cooling Utility Provider' at the Climate Control Awards 2012 for its excellence in providing innovative, reliable and energy efficient cooling solutions.
© Zawya 2013
