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Public Investment Fund acquires 30% stake in Saudi Tabreed

Saudi Tabreed currently manages 779,000 tonnes of refrigeration (TR) via contracts with major companies in Saudi Arabia

by Gulf Business

February 13, 2023

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PIF acquires 30 % stake in Saudi tabreed-800x533-1

Saudi Arabia’s Public Investment Fund (PIF) has acquired a 30 per cent stake in the Saudi Tabreed District Cooling Company (Saudi Tabreed).

The investment underscores the fund’s initiatives to develop the local utilities and low-carbon sectors.

Saudi Tabreed offers highly efficient solutions that drive reductions in power consumption and the costs of operation and maintenance, as well as supporting alternatives to traditional air conditioning systems.

Saudi Tabreed: key highlights

Saudi Tabreed currently manages 779,000 tonnes of refrigeration (TR) via contracts with major companies in Saudi Arabia.

This includes Saudi Aramco’s Dhahran district cooling plant, the Jabal Omar district cooling plant in the city of Makkah, the district cooling scheme at King Khalid International Airport in Riyadh, and a centralised cooling plant at the AMAAD Business Park in Dhahran. Saudi Tabreed also serves THE RED SEA project, which is a key part of Saudi Arabia’s Vision 2030.

Yazeed A Al-Humied, deputy governor and head of MENA Investments at PIF, said: “Our investment in Saudi Tabreed will support the achievement of PIF’s economic diversification goals, especially in light of the anticipated growth in Saudi Arabia’s district cooling market.

The investment is also fully aligned with PIF’s strategy to enable promising sectors in the country, and supports Saudi Arabia’s transition to sustainable and more efficient sources of energy.”

Mohammed Abunayyan, Saudi Tabreed chairman of the Board, commented: “PIF’s investment further enhances our position as a market leader in Saudi Arabia. With added credibility and stronger financial performance, being part of the PIF portfolio significantly expands our ability to support the country’s energy transition and sustainability targets. We are committed to working together as we move forward in our mission to enhance Saudi Arabia’s urban development through innovative, advanced, and highly efficient district cooling solutions.”

#PIF’s investment in Saudi Tabreed will develop the local utilities and low-carbon sectors through district cooling systems. pic.twitter.com/2TNjPPE38C

— Public Investment Fund (@PIF_en) February 12, 2023

PIF: Committed to sustainability

The fund has a strong track record of investing in the low carbon sector including electric vehicles and solar energy projects, as part of a commitment to develop 70 per cent of Saudi Arabia’s renewable energy by 2030.

PIF has major investments in renewable energy companies such as ACWA Power and the Sudair and Al Shuaibah Solar Energy projects, and in the development of electric vehicles through investments in Lucid Motors, Ceer and E1.

The fund also just raised $5.5bn from its second green bond issuance. The issuance follows the fund’s inaugural green bond in October 2022, the first-ever green bond issued by a sovereign wealth fund, and the first-ever 100-year green bond.

Read: Saudi Arabia’s PIF raises $5.5bn from sale of second green bond

Agreements with Aerofarms and Skyborn Renewables

In other news, PIF signed a joint venture agreement with AeroFarms, a US-based sustainable agriculture company. The two entities will establish a company in Riyadh to build and operate indoor vertical farms in Saudi Arabia and the broader Middle East and North Africa region. The first farm in Saudi Arabia, which is expected to be the largest indoor vertical farm in the MENA region, will have an annual production capacity of up to 1.1 million kilogrammes of agricultural crops.

Also read: Saudi’s PIF partners with AeroFarms to build indoor vertical farms across MENA

In December last year, PIF also acquired up to 9.5 per cent in Skyborn Renewables, an offshore wind developer and operator, alongside Global Infrastructure Partners.The investment will allow PIF to participate in the acceleration of energy transition and clean energy at an international scale through an investment in a geographically diversified offshore wind energy platform, the fund said in a statement.

The Skyborn platform includes interests in operating and under-construction projects in Germany, France and Taiwan as well as a pipeline of over 30 GW (gross) of highly diversified offshore wind projects in various stages of development.

The company has over two decades of development experience, has developed over 7GW of capacity developed to-date, and maintains a presence in over 15 European and APAC markets.

Read: Saudi’s PIF acquires up to 9.5% stake in Skyborn Renewables