Arcapita Bank B.S.C.(c), a leading international investment firm headquartered in Bahrain, announced today that it has entered into an agreement with Dalkia, a leading global provider of energy services, to build a GCC portfolio of utilities projects, principally district cooling and related utilities , with a country focus on Saudi Arabia, Bahrain, Kuwait and Qatar. Arcapita and Dalkia are underway with the first two projects, representing a total equity investment of approximately $200 million, of which Arcapita holds 85%, and are aiming to deploy up to $1 billion in equity at the same ratio within 3 years on further projects.
Arcapita and Dalkia will form project specific joint ventures to provide GCC real estate projects with essential utilities services, leading with technologically advanced district cooling services. District cooling is increasingly being adopted as the preferred cooling technology for developers, for its energy efficiency, its reduced running costs, its lower capital expenditure requirements, its ease of maintenance and its minimal noise and vibration impact.
Atif A. Abdulmalik, Chief Executive Officer of Arcapita, observed “This investment is based on our belief that demand for outsourced, cost-efficient solutions for essential utilities such as district cooling will continue to rise in the fast developing countries of the Middle East. We believe that Dalkia is absolutely the right partner because of the excellent reputation it has grown in this field and we are particularly pleased that the joint venture has made a fast start, with two projects already under contract as part of the investment platform”.
Dalkia will be responsible for the development and management of the assets within the portfolio, using its active network of offices and personnel throughout the world. Dalkia is the leading European provider of energy services, and generated €6.9 billion in revenues for 2006. The company operates over 680 district cooling and heating systems in 38 countries.
With the expected levels of regeneration and construction in the region, demand for essential utilities will remain high and, increasingly, project directors are placing more stringent demands for energy and water efficiency. Consequently, a total investment of more than $15 billion in district cooling systems for the GCC region is predicted over the next decade. “Cooling represents a major ongoing running cost for property owners and the energy inputs required for our district cooling solutions are more than 50% lower than for conventional alternatives. Similarly, we can offer attractive efficiencies with our advanced water and wastewater management systems. Both of these factors make this region a very appealing investment opportunity and we are optimistic about this agreement with Arcapita,” said Bruno de Pellegars, Managing Director Development of Dalkia.
This transaction joins recent Arcapita investments such as the $4.2 billion acquisition of Viridian in the United Kingdom, the €620 million acquisition of Paroc and the $460 million acquisition of FORBA in the United States.
