Dubai only needs one DC firm, says Empower chief
Company looks to acquire another district cooling business
Empower CEO Ahmad Bin Shafar has said that the company may look at further consolidation in the district cooling market following its $500mn acquisition of Palm Utilities and Palm District Cooling.
Speaking at a press conference outlining the rationale for the deal on Tuesday, Bin Shafar said: “Frankly speaking, Dubai does not need more than one company in district cooling.”
He argued that district cooling plants largely take one single form, and since prices for services provided are set by Dubai’s Supreme Council of Energy, a single provider could bring greater benefits in terms of the scale of its operations and deals it can cut with contractors, equipment manufacturers and other suppliers.
He estimates that Empower can achieve synergies of around $12.25mn (AED45mn) through the combination of its operations with those of Palm Utilities/Palm DC and added that the $600mn syndicated loan it announced earlier this week had already reduced the cost of its borrowings.
“Empower has a very good financial position in front of the banks,” he added. “And we still have an appetite to acquire another business. I’m just waiting for the green light to come from the top and believe me within six months I will take it.”
Discussing potential targets, he said: “There are two companies left - Either/or… one of them.”
An analysis of the Empower/Palm Utlities merger will appear in issue 502 of Construction Week.