Empower urges district cooling investment
CEO calls on banks to invest in 'golden opportunity'
The CEO of the Middle East’s largest district cooling provider, Ahmad Bin Shafar of Empower, has urged regional and local banks to enhance their funding to the district cooling industry.
Tipping it as one of the safest industries in terms of risks and return on investment, he said: “Key players in the district cooling industry in the UAE and the Gulf have succeeded in building a world-class infrastructure. The demand has risen rapidly in the UAE in the last decade, lowering the risks of such investments significantly, compared to other opportunities.”
With the adoption rate of district cooling technology growing rapidly, residents are becoming increasingly better aware of the benefits the system offers, both financially and environmentally, over traditional air conditioning systems.
Bin Shafar added: “Despite the positive scenario, banks are reluctant to invest in the sector due to lack of understanding of the nature of the business. As a result, a golden opportunity is being lost to invest in a promising and safe industry in the nature of utility, considering high ambient temperatures prevailing almost throughout the year.”
Through an ambitious strategy to finance its projects through a mix of debt and equity structure, Empower announced late last year that it had successfully refinanced a US$175 million credit facility through a consortium of Royal Bank of Scotland, Standard Chartered, Citibank, Emirates NBD and Mashreq. This was part of an earlier facility of US$225 million, out of which Empower settled US$50 million. The company has refinanced the balance of US$175 million for a five-year tenor repayable between 2011 and 2015.