Union National Bank (UNB) and Dubai Islamic Bank (DIB) have been awarded the mandate to arrange a AED 250 million ($68.1 million) loan facility to finance the medium-term expansion plans of Abu Dhabi-based National Central Cooling Company (Tabreed).
The two banks will each underwrite AED 125 million ($34 million) with the facility being a mix of conventional and Islamic financing, spread over 10 and 12 years respectively. A formal signing is scheduled for November.
Tabreed will use the funds to build, manage, operate and own district cooling plants in the UAE. In August, Canada’s SNC Lavalin signed a $40 million turnkey contract with Tabreed for the construction of two district cooling plants and a distribution network at the Zayed Military City in Sweihan.
Each of the cooling plants will produce 10,000 refrigerated tonnes a day (t/d) of cooling capacity to be distributed through a 15-20-kilometre network. The two new plants will bring the military city’s cooling capacity up to 24,000 refrigerated t/d, which is sufficient to cool 8,000 residential houses (MEED 11:8:00).
Tabreed says each of the plants will generate more than AED 300 million ($81.7 million) in revenues over the 20-year period of its agreement with the UAE Armed Forces.