Palm District Cooling secures USD50 million Islamic finance facility from Dubai Islamic Bank

This facility is to be refinanced by a longer term financing arrangement.

Commenting on the arrangement, Mohamed El Shentenawy, Chief Financial Officer of PDC said: ' We are very pleased at having secured this USD fifty million finance facility from DIB, which represents the first Islamic facility for PDC. ' ' This facility is a key milestone in the execution of our financial strategy and demonstrates our ability to raise funding to finance our ambitious capital expenditure needs.' he added.

Speaking on the transaction, Sayed Naved Ali, Senior Vice President, Corporate Banking at Dubai Islamic Bank said: 'Dubai Islamic Bank is proud to be part of this transaction. The Bank has been instrumental in providing innovative structural financing solutions geared to the needs and requirements of large projects and institutions in the UAE and the region.'

Completing the first phase of its capital expenditure financing, this is the 3rd corporate finance facility the company has secured this year - the previous two being an US$ 75 million facility from First Gulf Bank and an US$ 82 million facility from National Bank of Dubai - bringing the total funds raised during 2006 to US$ 207 million. These corporate finance facilities are designed to finance the company's capital expenditure requirements over the next 12 months and will be subsequently refinanced through long term non recourse arrangements.

PDC is currently undertaking an exponential expansion by constructing district cooling plants and infrastructure at several large real estate developments in the UAE. These include The Palm Jumeirah, Jumeirah Lake Towers, Discovery Gardens and several others. Currently, the company has 550,000 Tons of Refrigeration (TR) capacity under construction. By 2010, the expected installed capacity of PDC will cross 1.8. million TR, making it the world's largest district cooling company. The financing raised will be utilized in funding the construction of these plants and infrastructure.

'The next phase of financing strategy will focus on a different approach ,' said Mohamed El Shentenawy. 'For this we are exploring several options such as Sukuks, private equity placements, structured financing and others. We are currently working with several regional and international institutions to evaluate the most suitable options. We look forward to the possibility of Islamic banks and financial institutions such as Dubai Islamic Bank becoming an important source of future financing.'