Summer seems the right time to talk about district cooling. It has been a rugged period for the region’s youngest utility sector. Lower-than-expected growth in off-take, from developments that are proceeding at a slower rate, is tempering the expansion of an industry that has been quite bullish in the past.
But it is still expanding. Speaking to UME this week, Sujit Parhar, the new CEO of Tabreed, sounded confident about the coming months. He is expecting around 16 chilled water plants to come online this year and only has a couple where the construction is on hold. The resulting spike in off-take will increase revenues.
It is reasonable to assume that it will please shareholders. They’ve had a rough ride over the last few months, since the company’s share price dropped, along with almost all others in the local exchanges.
As the only utility on the DFM, it has perhaps been unfairly treated by market volatility. Part of the problem is the newness of district cooling as a utility. Traditionally utilities offer solid, long-term, predictable returns. They are a slow and steady investment. But district cooling is not fully recognised as a utility yet.
This lack of market awareness has left Tabreed and other chilled water providers needing to educate their investors, whether public or private, in how their returns will be seen. When that work is done the industry will be in a better position to consider itself a fully-fledged utility and the path to growth will be steadier.
Read the full interview with Sujit Parhar in the July edition of Utilities Middle East.
Staff Writer
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How to identify a new utility?
District cooling needs to build awareness if it wants to grow
Summer seems the right time to talk about district cooling. It has been a rugged period for the region’s youngest utility sector. Lower-than-expected growth in off-take, from developments that are proceeding at a slower rate, is tempering the expansion of an industry that has been quite bullish in the past.
But it is still expanding. Speaking to UME this week, Sujit Parhar, the new CEO of Tabreed, sounded confident about the coming months. He is expecting around 16 chilled water plants to come online this year and only has a couple where the construction is on hold. The resulting spike in off-take will increase revenues.
It is reasonable to assume that it will please shareholders. They’ve had a rough ride over the last few months, since the company’s share price dropped, along with almost all others in the local exchanges.
As the only utility on the DFM, it has perhaps been unfairly treated by market volatility. Part of the problem is the newness of district cooling as a utility. Traditionally utilities offer solid, long-term, predictable returns. They are a slow and steady investment. But district cooling is not fully recognised as a utility yet.
This lack of market awareness has left Tabreed and other chilled water providers needing to educate their investors, whether public or private, in how their returns will be seen. When that work is done the industry will be in a better position to consider itself a fully-fledged utility and the path to growth will be steadier.
Read the full interview with Sujit Parhar in the July edition of Utilities Middle East.
Staff Writer
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and... More by Staff Writer
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