State Oil Fund of Azerbaijan invests in PAL Cooling Holding

The State Oil Fund of Azerbaijan (SOFAZ) and the Arab Energy Fund (TAEF) have agreed to partner with CVC DIF to invest in a co-investment vehicle that invests alongside DIF VII, which recently acquired a 50 percent stake in PAL Cooling Holding ("PAL"), a principal district cooling operator in UAE, Report informs referring to SOFAZ's statement.

In June 2025, CVC DIF, the infrastructure strategy of leading global private markets manager CVC, and Tabreed, one of the world's leading district cooling companies, agreed on the acquisition of PAL in a 50/50 joint venture with an equity value of approximately AED 3.8 billion.

PAL Cooling Holding is the second-largest district cooling provider in the UAE, managing eight long-term concessions with an average remaining duration of 25 years and serving over 45,000 customers. The company plays a critical role in enabling efficient, reliable, and sustainable cooling services across several of the UAE's key developing districts.

The participation of The Arab Energy Fund and SOFAZ alongside CVC DIF brings together three institutional investors whose combined capital strength and sector-specific expertise reinforce the platform's operational resilience and long-term strategic development. Tabreed, which retains its 50 percent stake in the JV with CVC DIF, brings unrivalled experience in the district cooling sector, being the UAE's first such company. Founded in 1998, Tabreed is publicly listed on the Dubai Financial Market and now owns and operates 99 plants in six countries.

Khalid Al-Ruwaigh, Chief Executive Officer, The Arab Energy Fund, said: "We are proud to partner with CVC and the State Oil Fund of the Republic of Azerbaijan on this landmark investment in PAL. District cooling plays a vital role in achieving greater energy efficiency, and we are supporting a group that exemplifies operational excellence. This collaboration reflects The Arab Energy Fund's focus on high-quality platforms and partnerships that deliver long-term value and impact."

SOFAZ Deputy CEO Rovshan Javadov stated: "SOFAZ's participation in this transaction underscores our strong interest in the UAE and broadly in the Gulf region. District cooling is a vital component of energy-efficient urban development, and this transaction supports our objective to deepen cross-border economic cooperation and build strategic partnerships. We are pleased to expand our investment presence in Abu Dhabi alongside reputable partners in a consortium contributing to the region's broader sustainability goals."

Allard Ruijs, Partner and CIO at CVC DIF, said: "We very much appreciate the partnership with SOFAZ and The Arab Energy Fund, which fully aligns with CVC's commitment to the region and investment in the UAE, where we look to back businesses that support development across the country. PAL Cooling is a high-quality investment that will provide all our investors with solid returns, while offering the potential for long-term growth and sustainable value creation."

The Arab Energy Fund (The Fund) is a multilateral impact financial institution focused on the MENA energy and utility sectors, established in 1974 by ten Arab oil-exporting countries. The Fund's mission is to support the energy ecosystem with debt and equity solutions to enable energy security and sustainability and to develop local value chains and services in the MENA region. The Arab Energy Fund creates impact by contributing to economic prosperity and enabling local communities via talent development and knowledge creation. The Fund offers a comprehensive range of funding solutions across the entire energy value chain to leading public and private sector business partners in over 35 markets. The Arab Energy Fund applies best-practice ESG principles across all operations, with environmental and socially linked projects comprising c.20% of its USD 5.8bn loan portfolio. The Arab Energy Fund is the only energy-focused financial institution in the MENA region rated ‘Aa2' by Moody's, ‘AA+' by Fitch and ‘AA-' by S&P.

The State Oil Fund of the Republic of Azerbaijan (SOFAZ), established in 1999, is a sovereign wealth fund dedicated to managing the nation's oil and gas revenues, with a commitment to safeguarding and enhancing wealth for future generations. As a long-term investor with over $70 billion in assets under management, SOFAZ pursues a diversified investment strategy that encompasses global opportunities across various sectors, including fixed income, equities, gold, real estate, and infrastructure.

CVC DIF is a leading global mid-market infrastructure equity fund manager. Founded in 2005 and headquartered in Amsterdam, the Netherlands, CVC DIF has c.€19 billion of infrastructure assets under management in energy transition, transport, utilities and digitalisation. With more than 250 people in 12 offices, CVC DIF offers a unique market approach, combining a global presence with the benefits of strong local networks and sector-focused investment capabilities. CVC DIF forms the infrastructure strategy of the leading global private markets manager, CVC. This partnership allows CVC DIF to benefit from CVC's global platform, with 30 offices across six continents.