Tabreed explores buying Multiply’s cooling business

National Central Cooling Company, also known as Tabreed, is exploring a bid for Multiply Group’s district cooling business that could be worth at least $1 billion, two sources with knowledge of the matter told Reuters.

Dubai-listed Tabreed is working with Citi on the potential offer for Multiply’s PAL Cooling Holding (PCH), said the two sources.

Tabreed and Citi declined to comment. Multiply did not respond to a request for comment.

Abu Dhabi-based investment holding company Multiply is controlled by IHC, whose chairman is Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and brother of the country’s president, who controls a sprawling business empire.

District cooling plants, which deliver chilled water via insulated pipes to cool offices, industrial and residential buildings, have been developed as a more economical and environmentally friendly alternative to air conditioning.

They are popular in the UAE and elsewhere in the Gulf region, where summer air temperatures can soar above 50 degrees Celsius.

Founded in 2006, PCH has several plants in Abu Dhabi with a combined design capacity of 242,000 refrigeration tonnes (RT), according to its website.

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It benefits from long-term agreements with clients including developers Aldar and Reem Developers, which are riding a construction boom across the Gulf country, including in the capital city.

Tabreed’s possible bid follows a deal announced last year under which it was awarded the concession to provide district cooling to Dubai’s Palm Jebel Ali, a man-made palm-shaped island double the size of the world-famous Palm Jumeirah.

Palm Jebel Ali, which is being re-developed after years of inactivity due to a real estate crash, is projected to host over 80 luxury hotels and resorts and attract around 35,000 families.

Bloomberg had previously reported that Multiply was considering selling the division and was working with Standard Chartered on the deal.