The GCC Energy Fund – the region’s first private equity fund focused on the energy sector – has entered into the district cooling business by taking a fifty percent stake in a joint venture with US-based The Stellar Companies (Stellar).
The joint venture is to provide district cooling solutions as well as turbine inlet air chilling for power generation facilities, cold storage facilities and industrial cooling for various applications across the Middle East and North Africa (MENA) region.
Dubai-based Stellar Group LLC, which is a subsidiary of the joint venture, is already working with major companies such as Palm District Cooling and Tabreed, providing turnkey solutions for prestigious developments including the Palm Jumeirah and Jumeirah Lake Towers.
District cooling is a major growth market in the UAE and the wider region. Many of the companies operating in the Middle East are world class in terms of the scale of the projects and the quality of services provided, with an increasing number of these groups looking to take their expertise onto the global market.
“As an EPC contractor dedicated to the industrial cooling business, Stellar provides full service solutions, from conceptualization to completion. We have been recognized for our customized approach, which is based upon meeting the individual needs of each client,” said Ivan Norris, General Manager of Stellar Group LLC.
Stellar entered the Middle East market in 2003 after recognizing the strong potential in the region and the need for experienced operators with a demonstrated track record in industrial cooling.
Active in the US market since 1985, Stellar is recognized as a leader in single source project solutions, catering to facilities with a need for low temperature refrigeration systems.
“While our main business in the Middle East is currently focused on district cooling, our commitment to the region covers a much wider range of industrial cooling applications that we have developed over the course of the last two decades,” said Ron Foster, CEO The Stellar Companies.
In addition to its pioneering work in district cooling, Stellar has also completed a large turbine inlet air chilling contract for a power plant in Saudi Arabia that includes the world’s largest capacity thermal storage tank.
“The GCC Energy Fund is investing in this joint venture for a number of key strategic reasons. We recognize that district and industrial cooling will be major growth areas in the coming years as demand continues to rise, and firmly believe that Stellar provides the management competency and technical expertise to take the lead in this area,” said Adil Toubia, Chief Executive Officer, the GCC Energy Fund.
“Furthermore, energy conservation and efficiency are critically-important issues in today’s world, so taking a lead role in this pioneering joint venture will enable us to make a valuable contribution to reducing energy consumption across the region,” he added.
Commenting on the joint venture, Ron Foster said “The capital invested by the GCC Energy Fund provides us with an important resource needed to participate in meeting the extensive district and industrial cooling requirements of the region. We also see major opportunities to grow by leveraging the Fund’s knowledge and experience.”
The fund’s involvement in the joint venture is the fourth major deal it has announced since November 2006. The joint venture joins the fund’s investment in a major private placement for Maritime Industrial Services, the acquisition of a controlling interest in Oman’s Dhofar Power Company, and the purchase of a 33 percent equity stake in The Gulmar Offshore Group.
About Stellar Group LLC
Stellar Group LLC is a premier engineering, construction, and mechanical services firm that delivers turnkey projects throughout the Middle East and North Africa. Stellar provides solutions from concept to completion for district cooling plants and systems, turbine inlet air chilling systems, cold storage facilities, and food processing plants. Stellar also prefabricates and delivers modular chiller plants that can be installed quickly to meet urgent cooling needs and expanded to satisfy growing cooling loads. Stellar directly employs an experienced staff in the Middle East that can provide full service design, construction management, procurement, fabrication and commissioning for multi-site and multiyear projects.
About The GCC Energy Fund
The GCC Energy Fund is a private equity fund focused on the energy sector in the Middle East. The Fund is sponsored by Gulf International Bank (GIB) and Standard Bank and co-sponsored by Emirates National Oil Company (ENOC).
As a pioneering initiative, the Fund offers regional and international investors a unique opportunity to invest in the world’s most important energy market, through a well-diversified energy portfolio under the management of a professional team based in Dubai.
The Fund has positioned itself as the partner of choice for local and international energy players as they respond to the strategic opportunities and financial demands arising from the ongoing restructuring, privatisation and development initiatives taking place within the region.
