Experience counts

Sujit Parhar is the new CEO of the Abu Dhabi-based district cooling company Tabreed.



“Today it’s become a bit more difficult to fund projects,” he said. “We are looking at a few options - some include asset-life strategies and JVs with developers - in order to get core funding and some money into the game. We’re beginning to see the project finance market open up again.”

With funding comes risk and risk management is high on Parhar’s agenda. As well as considering how it will fund projects in the future, it is considering how it will manage risks appropriately. Parhar sounds a not of caution about utilities that have suffered at the hands of excessive risk.

“A lot of big utilities companies have gone down on risk management,” he said. “I think this is something we are very, very aware and careful of, making sure that the relevant checks and balances and controls are in place. Any risks brought into the company are adequately managed. We also make sure the deals we do don’t bring in any risks we can’t handle.” 

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Iron Rice Bowl

‘Iron rice bowl’ is a Chinese term used to refer to an occupation with guaranteed job security, as well as steady income and benefits.

Big business

District cooling is a growing sector. According to a recent market analysis from Frost & Sullivan, a consultancy, the market earned revenues of US $580.0 million in 2008 and estimates this to reach US $2 billion in 2013, at a compound annual growth rate of 28%.

Among all Middle East countries, Saudi Arabia seems to have the most untapped potential, with more than US $100 billion worth construction projects underway, according to Frost & Sullivan. Its rapidly expanding industrial base and population have increased the demand for power, which averages an annual growth rate of nearly 5%. The rising air conditioning needs account for almost 70% of this growth in power demand. By 2013, the district cooling market is expected to have an additional capacity of 4.5 million tons of refrigeration, mainly contributed by Saudi Arabia and Qatar.

Source: Analysis of the District Cooling Market in the Middle East Region

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