Dubai based-Empower is in advanced talks to buy rival district cooling company Palm Utilities for about $500m, according to sources close to the deal.

The deal is considered by sources in the emirate as a sign that Dubai is trying to accelerate asset sales as it approaches debt repayments of about $50bn over the next three years.

Empower is part of Dubai Electricity & Water Authority (Dewa) one of the most creditworthy government controlled entities, while Palm Utilities is ultimately owned by Dubai World, the government-owned investment firm that was at the centre of the emirate’s debt crisis in 2009.

The transaction will allow Istithmar, the investment vehicle through which Dubai World owns Palm Utilities, to raise funds to help pay off debts at its parent company.

Sources close to the deal say negotiations about the sale are nearing a conclusion, although it is not yet finalised. Empower is currently approaching at least six local and international banks to raise about $600m to fund the acquisition of Palm Utilities and some additional capital expenditure.

“Empower are seeking interest from banks to fund the acquisition of Palm Utilities,” says one Dubai-based source involved in the deal. “The funding is still at early stages, but the talks between the two companies are quite advanced.”

Another source says: “It is a very aggressive deal they are looking to put together to fund the acquisition.”

Dubai is under pressure from creditors to start making faster progress on asset sales to raise money. Dubai World is scheduled to repay about $4.5bn of restructured debt in 2015, part of a wider $25bn restructuring plan that also included debts of property developer Nakheel.

In June, Economic Zones World, another subsidiary of Dubai World, sold warehouse developer Gazeley in a contract that helped Jebel Ali Free Zone Authority (Jafza), also a subsisidary of Dubai World, to repay some of its debt and reduce the interest rate it pays on remaining loans.

Empower provides district cooling at various locations around Dubai, including the Dubai International Financial Centre (DIFC) and Dubai Healthcare City and Jumeirah Beach Residence (JBR) freezone, while Palm Utilities provides cooling for Nakheel developments including Ibn Battuta Mall, The Gardens, and the Palm Jumeirah.

Istithmar declined to comment and Empower did not respond to requests to comment.