UAE-based district cooling company Empower is expected to close the general syndication of a $600m loan imminently.

The deal has been well-received by the market and is likely to close oversubscribed within the next week, says a banking source. It is priced at 205 basis points.

The financing is being used to partly fund the acquisition of Dubai-based Palm Utilities, as announced in January.

Banks participating in the transaction are the US’ Citi, the UK’s Standard Chartered Bank, and the local Emirates NBD and Mashreq Bank. Saudi Arabia’s Samba Financial Group and Commercial Bank of Dubai also joined the transaction.

Syndicated loans have been rare since the financial crisis, with most loans being arranged via a club deal between a small group of banks.  The popularity of the Empower deal suggests the syndicated loan market is beginning to recover. 

The acquisition of Palm District Cooling, a subsidiary of Palm Utilities, by Empower is the latest asset to be sold off by parent company Istithmar, which is in turn a subsidiary of the indebted, state-owned Dubai World.

Empower is expecting the deal to increase its regional market share to about 70 per cent.

District cooling is promoted as a more energy-efficient, environmentally friendly way of providing air-conditioning to homes and offices. It provides chilled water used to fuel air-conditioning systems rather than using electricity.