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Sources say that Tabreed is evaluating a bid for Multiply district cooling.

Sources say that Tabreed is evaluating a bid for Multiply district cooling.

Two sources familiar with the matter said that Engie-backed National Central Cooling Co (also known as Tabreed) is considering a bid to buy Multiply Group’s district cooling business, which could be worth up to $1 billion.

The two sources declined to name themselves as the matter was not public.

Tabreed declined to comment. Multiply has not responded to our request for comment.

IHC controls Abu Dhabi's investment holding company Multiply. Its chairman, Sheikh Tahnoon Bin Zayed Al Nahyan is the UAE's National Security Advisor and brother of its president, who also controls an expansive business empire.

As an environmentally-friendly and more cost-effective alternative to air conditioning, district cooling plants deliver chilled water through insulated pipes in order to cool buildings such as offices, factories, and residences.

In the United Arab Emirates, and other parts of the Arabian Peninsula where temperatures can reach over 50 degrees Celsius in summer (122 degrees Fahrenheit), these are very popular.

According to its website, PCH was founded in 2006 and has several plants located in Abu Dhabi. These have a combined refrigeration capacity (RT) of 242,000.

It has long-term contracts with clients such as developers Aldar Developers and Reem Developers. These companies are riding the construction boom in the Gulf, including the capital city.

Tabreed could make a bid after announcing a deal last year in which the company was granted the concession for district cooling on Dubai's Palm Jebel Ali. This artificial palm-shaped island is twice the size of Palm Jumeirah.

Palm Jebel Ali is undergoing redevelopment after years of inactivity caused by the real estate crash. It is expected to house over 80 luxury resorts, and attract 35,000 families.

Bloomberg reported earlier that Multiply had been considering selling its division, and that it was working with Standard Chartered to make the sale. (Reporting from Andres Gonzalez and Hadeel al Sayegh, in London, and Hadeel in Dubai; additional reporting by Federico Maccioni; editing by Anousha and Sharon Singleton).

(source: Reuters)