Al Tayer (left) and Bin Byat |
The venture hopes to widen its reach at a later stage to some of the neighbouring markets and to other energy forms such as steam, said top officials.
Empower will have a capital base of Dh500 million, which will be paid up in phases.
"The kind of services that Empower will offer are fairly capital-intensive, which is why Dh500 million is, we believe, the right figure to start off with," said Ahmed bin Byat, director-general of Dubai Technology and Media Free Zone.
On whether the new venture isn't a move away from the free zone's core competence in the 'New Economy', bin Byat said: "We do not see it as such - it is just another way of offering value-added services to our tenants and beyond."
For Dewa, district cooling offers a chance to widen its service portfolio and, later on, tap new markets outside the UAE.
"Our long-term strategy for Empower definitely sees such a possibility - whether it be the other Gulf states initially and then the wider Middle East," said Saeed Al Tayer, Dewa's general manager and vice-chairman of Empower.
"We do have plans to offer services apart from district cooling going forward. It could be steam but captive power plants are not on the agenda."
Empower is taking on a project for the upcoming Jumeirah Beach Residence project in Dubai. Set for completion in 2005, the district cooling component will be an over 60,000 tonne unit - one of the biggest to date in the Middle East.
Also, the existing 12,000 tonne district cooling unit taking care of the free zone's requirements will be transferred to Empower's books. District cooling is very much a sunrise industry in the Gulf, but it offers the prospects of providing lower energy costs for property owners/developers.
As a rule of thumb, the cost of cooling represents 70 per cent of electricity charges. A unified district cooling solution would bring out some "sizeable" reductions in such costs, according to the officials.
Empower is the second venture of its kind to have been floated in recent weeks.
