Dubai, UAE: Building owners should explore project finance options with UAE-based banks, if multinational banks are not willing to lend funds for HVAC-related building retrofit projects, said Girish Reddy, Manager (Service & Parts) at Daikin Air Conditioning. Already, National Bonds is coming forward to lend finance to public-sector projects in the UAE. While sourcing funds remains a challenge for private-sector building owners, their best hope would be national banks, Reddy said. “A number of local banks, like ADIB, instead of investing into other markets, are looking into their own country’s development,” he said.

Reddy also pointed out to the fact that many national banks were also property owners, which he said, could mean an easing of procedures for lending funds. He highlighted the case of Abu Dhabi Commercial Bank (ADCB), which was the owner of properties in the form of ADCP. “So if they work for their own properties, that is the first market target [for building retrofit projects],” Reddy said.

Reddy said that manufacturers of HVAC products were willing to support building retrofit initiatives, such as the one launched by the Government of Dubai. He spoke of how Daikin had come forward to provide technological solutions to an accommodation project, which came under the jurisdiction of the Jebel Ali Free Zone Authority (JAFZA). “The project has our new R-32 refrigerant-driven inverter compressor, which is 40% more energy efficient than the conventional system,” he said. “We have got the order there. Apart from that, we are supplying magnetic chillers to the DEWA (Dubai Electricity & Water Authority) head office project.”

The DEWA project involves changing from an air-cooled system to a water-cooled system. “The investment is more, Reddy said, “but they will be getting premium efficiencies from the magnetic chillers, with a payback of 6-7 years.”

Reddy admitted that a longer payback period posed a challenge to building owners, but felt that they ought to think of the potential for savings on power consumption, which would positively reflect on their bottom line. “I agree that market conditions are a challenge and that there are those that are saying that their turnover is less, so their spending should be less,” he said. “They could, however, plan to execute retrofit projects in a phased manner, which would mean a shorter payback period.”

(The writer is the Editor of Climate Control Middle East and the Editorial Director & Associate Publisher of CPI Industry.)