Empower secures Islamic financing facility

15 September 2014

Fund will be used to develop district cooling network in Dubai

Emirates Central Cooling Systems Corporation (Empower) has secured a $127.8m Islamic financing facility from Dubai Islamic Bank (DIB).

The deal, which is Empower’s first Islamic financing facility, is based on a Mudaraba financing structure and has been provided on a standalone basis.

The facility has a tenor of five years, payable over half-yearly instalments. The funds will be used to finance the ongoing development of Empower’s multi-plant district cooling network in Dubai’s Business Bay area. The network will eventually consist of 350,000 refrigeration tonnes (RTs) of capacity for business, retail and residential buildings across this rapidly expanding neighbourhood.

Empower says it has the world’s largest district cooling services capacity, with 1 million RTs provided to a variety of developments such as Business Bay, Jumeirah Beach Residences, Dubai International Financial Centre, Dubai Healthcare City, Jumeirah Lakes Towers, Palm Jumeirah, Discovery Gardens and the Dubai Design District.

In June, Empower said it has repaid the first instalment of a AED520m ($141.5m) loan to Doha Bank. The loan was secured in August 2013 and carries a tenor of five years. The facility is to be repaid in 10 equal semi-annual instalments. Empower is using the facility to fund its UAE operations.

Earlier in 2014, the company closed a $500m syndicated loan to finance its acquisition of rival district cooling company Palm Utilities.

Empower was established as a joint venture between Dubai Electricity & Water Authority (Dewa) and Dubai Technology & Media Free Zone (Tecom) in 2003 to provide district cooling services in Dubai.

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