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Tabreed finishes the year on a high

17 December 2025

 

Tabreed is consolidating its position as a leading regional district cooling provider following a series of major transactions and new concessions that will reshape its portfolio in the UAE and beyond.

In 2025, the company completed the AED3.87bn ($1bn) acquisition of PAL Cooling Holding (PCH) in consortium with CVC DIF, and finalised the long-term district cooling concession for Palm Jebel Ali in Dubai as part of a joint venture (JV) with Dubai Holding Investments.

The PCH deal will eventually add about 600,000 refrigeration tons (RT) of capacity across eight long-term concessions in Abu Dhabi, raising Tabreed’s total connected capacity by 13% to 1.55 million RT. The AED1.5bn Palm Jebel Ali JV will ultimately deliver a further 250,000RT.

Speaking to MEED, Tabreed CEO Khalid Al-Marzooqi outlined how the company is integrating the newly acquired brownfield assets, developing greenfield projects and advancing a new generation of sustainable cooling solutions, including geothermal energy for data centres.

Tabreed’s recent milestones span both greenfield and brownfield investments, each requiring a different approach, says Al-Marzooqi. 

Greenfield projects, such as Palm Jebel Ali, remain Tabreed’s preferred route for new capacity, he adds. “The beauty of a greenfield is that you can optimise it the way you want. You build it as you want.” 

For new plants, Tabreed designs the civil structure to accommodate long-term capacity, while phasing in mechanical equipment in line with demand. By contrast, the acquisition of PCH is a large-scale brownfield integration, bringing in a portfolio of existing and future plants and networks, mainly on Abu Dhabi’s main island and Reem Island.

The immediate focus is on integration and driving network synergies. “That’s the beauty of district cooling. If you achieve the synergies, the benefits literally double up and triple up as well,” Al-Marzooqi says.

By interconnecting plants, Tabreed can avoid building for peak capacity at each individual site and instead leverage shared spare capacity across the network.

Growth strategy

Acquiring a competitor in Abu Dhabi is part of a strategy to sustain growth in a sector where many contracts follow build-own-operate-transfer or similarly time-bound models.

Organic growth via new concessions and inorganic growth via acquisitions are both seen as key to maintaining and expanding the asset base.

Tabreed’s portfolio remains weighted towards the UAE, with the home market accounting for the bulk of its business. 

Beyond the UAE, Tabreed has built a regional presence, with a partially owned business in Saudi Arabia, where it sees significant growth potential as district cooling is integrated into gigaprojects and major urban developments; a wholly owned operation in Bahrain; and a majority stake in Tabreed Oman, a market that Al-Marzooqi says is expanding well.

Despite the energy and lifecycle cost benefits of district cooling, Al-Marzooqi says tariff subsidies on conventional, building-level cooling are a barrier to adoption in parts of the UAE.

“The killer for us is subsidy,” he says, explaining that artificially low tariffs for individual customers make it harder for district cooling to compete on price in Abu Dhabi compared to Dubai.

He says that policy support and regulatory mandates are needed, particularly as existing buildings approach the end of life for their standalone cooling systems. At that point, compulsory connection to district cooling could lock in significant energy savings and emissions reductions at city scale.

Raising Abu Dhabi’s district cooling penetration from about 15% towards Dubai’s estimated 30% remains a key concern and strategic objective.

In Abu Dhabi, Tabreed has developed … the Middle East’s first geothermal-powered district cooling plant

Geothermal breakthrough

Alongside portfolio growth, Tabreed is investing in new technologies to decarbonise cooling, with a focus on large campuses, major developments and, increasingly, data centres.

At Masdar City in Abu Dhabi, Tabreed has developed what Al-Marzooqi describes as the Middle East’s first geothermal-powered district cooling plant. 

“We have started off by building the region’s first geothermal plant, to prove the concept of using geothermal energy to provide cooling,” he says. 

The pilot plant is already achieving efficiency levels in the range of 0.5-0.6 kilowatts per ton (kW/ton) of cooling, better than Tabreed’s typical district cooling benchmark of about 0.85kW/ton. Conventional, standalone cooling systems generally consume about twice as much energy per ton.

“This is proof that if you really want to pursue a sustainable cooling solution for data centres in this area, this is the one,” he says.

Data centres are emerging as a priority growth segment for Tabreed. The facilities have high, continuous cooling loads and increasingly stringent decarbonisation requirements, making them a natural fit with both district cooling and geothermal systems.

Al-Marzooqi says geothermal cooling is a “godsend solution” for data centres, combining 24/7 availability with the potential for near-zero operational emissions.

For hyperscale and colocation data centre operators facing mounting pressure to reduce their carbon footprint, geothermal district cooling could offer a differentiated, long-term solution in the Gulf region, particularly where grid power is still largely fossil-fuel based.

Tabreed’s technology agenda is not limited to low-carbon generation. The utility is in the second phase of connecting its plants to a centralised digital control centre, enabling remote operation and optimisation.

The long-term goal is for the majority of plants to be unmanned, with operations centrally monitored and controlled. This integrated view of the network will enable the application of artificial intelligence and advanced analytics to fine-tune performance, optimise energy use and predict maintenance requirements. 

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Colin Foreman

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