What does the ENGIE deal mean for Tabreed from a capitalisation point of view?
The investment by ENGIE will support Tabreed’s overall growth and delivering on our strategy. From a capitalisation perspective, it required the conversion of Mandatory Convertible Bonds held by Mubadala. The conversion greatly simplifies the Tabreed balance sheet and saves Tabreed approximately AED 160 million in interest payments over the next two years. Mubadala have retained 42% of Tabreed’s equity, and Engie now holds 40%.
What benefits does the ENGIE deal offer Tabreed, in terms of business expansion and R&D?ENGIE is the largest independent electricity producer in the world, with excellent business capabilities. ENGIE may open doors to new opportunities, which we will consider, as and when they arise. This transaction will broaden the range of opportunities for Tabreed, and these will be evaluated on their merits. Ultimately, investments are a matter for the Tabreed Board to decide.
In terms of growth, are you seeing the anticipated uptake, or are fewer-than-expected buildings getting connected to receive chilled water in Abu Dhabi?
In the UAE, and across the region, District Cooling is aligned with the national energy efficiency strategy. Cooling of buildings, which accounts for about 70% of the peak electricity load in the GCC region, puts a large burden on resources. Compared with traditional cooling, District Cooling is highly efficient, as it reduces energy consumption as well as emissions. It is also cost-effective, providing cost savings from building operations and maintenance to reduced energy consumption, with a lifecycle typically spanning 20 years and more. In other words, it is a long-term investment and a key part of the foundation of sustainable, economic and urban development.
What are you doing towards plant optimisation?
As a pioneer in District Cooling in the GCC region, Tabreed has established the standards for the industry. However, with the understanding that standards need to continually evolve, the company is committed to ongoing innovation as both a business and sustainability practice. Tabreed partners with forward-thinking organisations on breakthrough initiatives that harness innovation in operations, technology, processes and products to deliver progress and set new standards in performance, energy and operational efficiency.
As part of the commitment, Tabreed partnered with Masdar on a joint project to enhance operational performance and reduce energy consumption in District Cooling plants. The project created a ‘smart controller’ capable of managing the plant to improve operational performance and decrease energy consumption, with minimal human interference. The project was implemented at one of Tabreed’s plants in Mohammed bin Zayed City, Abu Dhabi, with plans to scale it across other plants.