Dubai-based utility company Tabreed plans to issue up to $2 billion in bonds that cannot be converted into shares

BY THE ARAB TODAY Mar 27, 2025

Dubai-based utility company Tabreed plans to issue up to $2 billion in bonds that cannot be converted into shares

Dubai-based utility company Tabreed plans to issue up to $2 billion in bonds that cannot be converted into shares

Dubai’s National Central Cooling Company (Tabreed) said on Wednesday that it plans to issue up to $2 billion in non-convertible debt, such as bonds or sukuk.

Debt Instrument

The company’s shareholders approved the plan to issue debt, which may happen in one or more parts, during their annual general meeting on Tuesday. This was reported in a regulatory filing to the Dubai Financial Market (DFM).

On March 5, Tabreed raised $700 million by issuing its first green sukuk, which will last for five years. This was the first sukuk issued under Tabreed’s $1.5 billion trust certificate program. The new sukuk will be listed on the London Stock Exchange’s International Securities Market.

Tabreed has strong credit ratings from Moody’s (Baa3) and Fitch (BBB), which match its corporate ratings.

The company is mostly owned by Abu Dhabi’s sovereign wealth fund, Mubadala Investment Company. Its CEO, Khalid Al Marzooqi, was ranked seventh in Forbes Middle East’s 2024 Sustainability Leaders list under the Energy & Utilities category.

Background

In 2006, Tabreed issued a $200 million sukuk, which was the first to be listed on the London Stock Exchange. It was also the first rated sukuk by a company in the Middle East.

Tabreed currently runs 92 district cooling plants across six countries. Last year, it became the world’s first district energy company to receive the verified carbon standard.

In 2024, the company reported revenue of $653.4 million (AED 2.4 billion), which was a 4% increase from the previous year. This growth was mainly due to a 5% rise in cooling consumption, reaching 2.7 billion refrigeration ton hours (RTH).

Net profit for 2024 was $155.2 million (AED 570 million), up 32% from 2023. Earnings before interest, taxes, depreciation, and amortization (EBITDA) also grew 5% year-on-year to $326.7 million (AED 1.2 billion), with a margin of 51%.

Key Figure

Fitch expects that ESG sukuk (environmentally friendly Islamic bonds) will exceed $50 billion by 2025. This growth is driven by investor interest, efforts to diversify financial products, and government sustainability plans in some Muslim-majority countries.

Published: 27th March 2025

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