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Company Voice: Emicool, United Arab Emirates

Emicool is a leading district cooling provider in the Middle East. District cooling is essentially utility-scale air conditioning provided to a large area in a sustainable and reliable way, using chilled water distributed through an underground piping network. It has been described as the “most important utility service in the UAE,” as it can reduce energy consumption by more than 50% when compared to individual air conditioning units. This aligns with the government’s net zero targets. While Emicool’s business model is inherently sustainable, the company is also setting ambitious targets to embed sustainability into all of its processes, including its supply chain from generation to delivery.

How have you benefitted from the One Actis model?

The One Actis model is about optimising value creation. Actis has an advanced model for supporting companies to create value through a process that requires all teams to work together regularly. We can rely on the full range of Actis expertise to help us achieve our goals, whether it’s optimising operations, increasing our use of recycled water or implementing solutions for improving energy efficiency. We also receive support from the Actis Operations team, which brings significant technical expertise and creates this culture of constant improvement.

Emicool’s main input costs are electricity and water. Improving electrical efficiency is a crucial driver of both our financial returns and our sustainability agenda. Here we can leverage Actis’ experience in energy operations. We are working to source as much renewable power as possible for our operations; our HQ is already largely powered by solar panels and we are moving to an electric vehicle fleet. Over time we hope to work with Actis to procure energy for Emicool’s core operations from renewable sources, using their expertise in this area.

What’s key is that the Actis team is right here, close to the office and very ‘hands on’. Their network is extremely valuable for us to connect with teams in different offices and different sectors, with the expertise to help us with a specific challenge we may be facing.

As part of that have you had many exchanges with other Actis companies?

Yes, lots. One good example is how we collaborate with Yellow Door Energy on solar projects. Yellow Door Energy is another Actis investee company based in Dubai. We are currently discussing ways in which we can collaborate to achieve both of our objectives.

Actis investee companies benefit from each other on a constant learning curve through regular interactions. For example, our team participated in the Actis Generation Offsite, during which we were able to engage with the management team of a power distribution business and identified a lot of common ground and potential opportunities to implement similar solutions to optimise our metering and billing processes. We try to benefit from our access to this global network of seasoned industry leaders.

What's next for Emicool?

Our focus remains on delivering the targets that we have agreed in our 10-Year Business Plan. For example, we’d like to increase the company’s use of recycled water to 55% this year, up from 40% last year. We are expanding our commitment to renewable energy generation and embarking on a significant investment in a new enterprise resource planning system. This strategic initiative will pave the way for the implementation of the ECO Digital Transformation System.

Additionally, we are dedicated to the environmental sustainability of our fleet, with a specific objective of transitioning 70% of our vehicles to electric-driven ones. This step underscores our ongoing efforts to reduce our carbon footprint and embrace cleaner, more sustainable transportation alternatives. We are rolling out the final phase of our energy efficiency capex programme. We are exploring opportunities to optimise our capital structure through different financing solutions. We are always evaluating ways to enhance the customer experience and are currently implementing new technology to do so. And finally, we are also always looking at ways to grow the company, through our existing exclusive concessions zones and beyond. As you can see, we have many priorities, and we have a very strong team who is focused and motivated to achieve our common objectives.

What was the attraction of investing in Emicool?

District cooling represents an exciting opportunity to invest in essential, sustainable infrastructure, as the preferred long-term cooling solution in the region with the efficiency benefits that Dr. Adib mentioned above. We targeted Emicool, in particular, because they have a proven track record over the past 20 years, operate under robust long-term contracts, and are concentrated in an investment-grade country that offers USD-linked cash flows. While the investment provides all of these risk protections, it also offers meaningful upside by implementing proven value creation strategies.

How do you see the One Actis model helping?

Part of my role is to open the broader Actis network to the Emicool team, to see what expertise we can draw on across Actis to help Emicool achieve its full potential.

In addition to the examples that Dr. Adib has provided, we have actively supported the company in their objectives with respect to regulatory engagement, business development, and financing, among others. For example, we often accompany the management team on meetings with regulators and prospective customers and introduce the company to our relationship banks. We leverage the expertise of our Operations, Sustainability and Banking teams to ensure that Emicool benefits from the full capabilities of the global Actis platform.

Over time, we hope to use our growing expertise in cooling to support other areas of the business, e.g., cooling is a critical component of data centre infrastructure, which creates an exciting opportunity for our investee companies to collaborate.