Etihad ESCO CEO: More ESCOs needed to cater huge Saudi retrofit market

Etihad ESCO CEO talks about project financing for retrofits and venturing into Saudi Arabia

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Ali Al Jassim, CEO, Etihad ESCO.
RichardDayaoReyes
Ali Al Jassim, CEO, Etihad ESCO.

There has been a growing demand for retrofit projects in Dubai and Etihad ESCO is responsible for driving that demand, according to Ali Al Jassim, CEO, Etihad ESCO. He said: “We started with one project, which was in JAFZA, Dubai. Now, we have completed nine projects and have nine in hand. That demand has been created by Etihad. People believe in it because the projects are already implemented. In the old days, it was just in the presentations.”
Al Jassim was talking to MEP Middle East on the sidelines of the 5th Annual RetrofitTech MENA Summit held on 9 and 10 April 2019 in Dubai. He did admit that initially banks were not on-board in the energy efficiency business when it came to financing. He said: “[The banks] needed to know more about the business to understand how financing could be done for retrofit projects. But today the banks can go to projects, and inspect the cash flow. They can learn and get educated about how savings can be achieved, how the guarantees can be secured and then they can participate in it.”
He also mentioned that the other thing that banks could do is to carry out retrofits at their own headquarters or branches. Al Jassim said: “We have an energy service company (ESCO) that are experts in providing solutions to banking facilities. Banks usually have tight security than any other facilities. The working hours are long which allow for our ESCOs to work during those hours. Banks wouldn’t allow you to go in after work hours for security reasons. These are things that we need to deal differently with bankers.”

Etihad ESCO does face the challenge of making retrofits sustainable. Al Jassim said: “Etihad ESCO has to create that sustainability through continuity. It is really challenging to have enough projects for everyone and create that demand. The number of ESCOs we have here in Dubai is 23 and it is not a small number. We still want more. We are creating the demand and the projects, so this is very challenging; however, we are involved with all government entities, and we would like the private sectors, hotels, hospitals, educational institutes, factories and industrial sector to follow.”
Al Jassim also clarified a misconception in the industry that Etihad ESCO was taking away projects from FM companies, MEP and electrical contractors, but it was quite the contrary. He said: “This is not true. We are not doing projects on our own. We don’t have a team of labourers who carry out projects. In fact we create projects FM companies, MEP and electrical contractors. But they need to take the step to become an accredited ESCO company. Once they do that they will receive invitations from us for projects and tendering.

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“We have a couple of facility management companies that have become good energy services company who are working with Etihad on energy saving projects. We encourage FM companies to take that initiative, look at the requirements on how to become an ESCO, get accredited, and then work as an ESCO.” He said that in Dubai there are small-sized ESCOs compared to the US, Canada, and European countries, where ESCOs have more than 100 employees. In Dubai, there are ESCOs with less than 10 staff. He added: “It’s easier to do it at a smaller scale. We encourage MEP contractors and FM companies to become an ESCO.”
Al Jassim later spoke about Etihad ESCO going into the Saudi market. In February 2019, Etihad ESCO and Vision Invest announced a new Joint Venture Company that has been established to provide fully integrated energy efficiency solutions for both the private and public sectors in the Kingdom of Saudi Arabia (KSA). The move is in support of KSA Vision 2030, wherein sustainability, conservation and efficiency are key themes in building a sustainable and efficient economy.

On the reason for entering Saudi, Al Jassim said: “We have already created the momentum in Dubai. We should share that experience and knowledge and save time for our brothers in neighboring countries like KSA.” He added that the Saudi market is 10 times bigger than the market in Dubai. He said: “There is potential [in Saudi]. The buildings are quite older. So I think the savings potential is greater than what we have here. We will need more ESCOs so they can work with us there. That is why we are asking for more ESCOs to join us. FM companies to join us. There is a big demand in Saudi.
“We have already established a joint venture. We are working on the setup of that joint venture. By the end of year we will have the setup ready. We will have perhaps one project to showcase. We can also invite them to Dubai and see what we have done here. So that there is a buy in from clients, government entities, and all FM firms and ESCOs working in that region.”

Etihad ESCO and TAQATI participated in a panel discussion titled Choosing the right path to energy efficiency: Energy Optimization, retrofitting and Renewables (Solar), at RetrofitTech MENA Summit. The panel discussed different approaches to energy efficiency in order to optimise energy and save costs and examined why one size strategy does not apply to all when it comes to energy efficiency.

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