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The company already has close ties to the PIF, with agreements to provide cooling for the fund’s Red Sea tourism project and an entertainment district close to Riyadh called Qiddiya. Image Credit: Bloomberg

Dubai: The Public Investment Fund is in talks to buy a stake worth about $250 million in Saudi Tabreed, the local venture of UAE-listed National Central Cooling Co., according to people familiar with the matter.

The deal would give the PIF, as the wealth fund is known, a significant holding in the district cooling company ahead of a planned initial public offering in the next two-to-three years. Terms of the agreement aren’t finalized and may change, they said.

National Central Cooling Co., known as Tabreed, owns a stake in the Saudi business, along with the kingdom’s Vision International Investment, Al Mutlaq Group and IDB’s Infrastructure Fund II.

A representative for the PIF declined to comment, while Saudi Tabreed didn’t respond to requests for comment.

The PIF is a key part of Crown Prince Mohammed Bin Salman’s plans to wean the kingdom’s economy off its reliance on oil. In recent years, the fund has rapidly expanded to control over $600 billion of assets across the globe and now holds stakes in Lucid Motors and Uber Technologies. In Saudi Arabia, it controls most of the country’s largest companies such as Saudi National Bank and Saudi Telecom Co.

Saudi Tabreed provides centralized cooling systems for urban buildings. The Middle East, where temperatures often soar above 110 degrees Fahrenheit (43 Celsius) during the summer, is the biggest market for such cooling systems. Saudi Tabreed operates a current-contracted capacity of about 751,000 tons of refrigeration, according to its website.