Dubai Plans to List District Cooling Firm Empower in IPO Push

(Bloomberg) -- Dubai plans to list Emirates Central Cooling Systems Corp., a venture between a unit of Dubai Holding and a state-owned utility, on its stock market as part of plans to deepen its capital market.

The media office cited directives from Dubai’s ruler and deputy ruler for the listing of the company, also known as Empower. It didn’t provide further information.

It’s the second announcement in less than a week on initial public offering from Dubai as it seeks to revive trading volumes on its stock market and catch up with rival exchanges in Abu Dhabi and Riyadh. Last week, Dubai said it plans to list Tecom Group, which houses business complexes such as Dubai Internet City, Dubai Media City, Dubai Design District and Dubai Industrial Park.

The government said last month it wants to sell shares in 10 companies, and it has been encouraging private and family-owned businesses to follow suit. The sheikhdom, part of the United Arab Emirates, has already announced plans to sell shares in its main utility Dubai Electricity & Water Authority and the Salik road toll-collection system.

District Cooling

Established almost two decades ago, Empower is a venture between Dubai Electricity & Water Authority and Tecom, a part of state-owned Dubai Holding. The company says it’s the world’s largest district cooling services provider, serving more than 140,000 corporate and individual consumers and controlling a market share of more than 76% in Dubai’s district cooling sector.

The district cooling industry has been consolidating in the UAE, with Abu Dhabi’s Tabreed buying two district cooling plants from Aldar Properties PJSC last year. In 2019, Tabreed also bought an 80% stake in a district cooling facility from Emaar Properties PJSC.

Empower this year acquired Dubai property developer Nakheel’s district cooling plants and last month signed an agreement to acquire the district cooling systems of the Dubai International Airport.

District cooling is the preferred and most sustainable method in the Gulf region to combat temperatures that often soar above 110 degrees Fahrenheit (43 Celsius) during the summer. Plants generate chilled water, which is then sent through pipes to cool the air of buildings ranging from Dubai’s many skyscrapers and villas to its metro line and theme parks.

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