US$500 million deal creates the world’s largest district cooling services provider

Empower has announced that it has acquired Palm Utilities, including its district cooling service entity Palm District Cooling (PDC), from Istithmar World, in what is considered to be one of the largest ever acquisitions in the district cooling industry.

The agreement was signed by His Excellency Ahmad Bin Shafar, CEO, Empower, and His Excellency Hamad Buamim, Board Member of Dubai World, in the presence of His Highness Sheikh Ahmed bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority, Chairman of Dubai Airports, Chairman and CEO, Emirates Airline and Chairman of Dubai World; His Excellency Mohammed Ibrahim Al Shaibani, Board Member of Dubai World and Director General of HH The Ruler’s Court; and His Excellency Saeed Mohammed Al Tayer, Board Member and CEO, DEWA, and Chairman of Empower, the announcement added.

The acquisition will be funded through a combination of internal accruals, equity and debt financing, Empower revealed.

According to Empower, it will immediately take over all projects, functions, operations, assets and liabilities of Palm Utilities, including Palm District Cooling, which was previously owned and operated by Istithmar World.

In the context of the landmark deal, HH Sheikh Ahmed bin Saeed Al Maktoum, said: “Empower’s acquisition of Palm Utilities and Palm District Cooling is in response to the vision of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to position Dubai as a centre for sustainable development. The new combined entity is also a reflection of HH’s vision to place the UAE at the forefront of industry and business.”

Saeed Mohammed Al Tayer, observing that the deal emphasisised the importance of establishing sustainable communities across the Emirate, said: “Through this acquisition, we aim to enhance energy efficiency and meet the growing demand for district cooling services in response to Dubai’s increasing economic development, having won the bid to host Expo 2020.”

Ahmad Bin Shafar, throwing light on the subject, said: “Empower’s acquisition of Palm Utilities and PDC, which is worth about US$500 million is an important step towards enhancing our strategy, which aims to support Green Economy for Sustainable Development, the long-term national initiative, launched by HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai. This deal will position Empower as the leader in district cooling on a regional and international level. It will also increase the company’s market share in the UAE to about 70%, in addition to increasing its capacity to around one million Refrigeration Tonnes (RT), and therefore, the company becomes the largest district cooling provider in the world from a capacity perspective…. It will also serve to develop sustainable energy practices in the Emirate, which will reflect positively on the development of this vital sector, and, therefore, guarantee the availability of efficient district cooling services in Dubai.”