LONDON/DUBAI, March 25 (Reuters) - Engie

-backed National Central Cooling Co, also

known as Tabreed, is exploring a bid for Multiply Group's

district cooling business that could be worth at least $1

billion, two sources with knowledge of the matter told Reuters.

Tabreed is working with Citi on the potential offer

for Multiply's PAL Cooling Holding (PCH), said the two sources,

declining to be named as the matter is not public.

Tabreed and Citi declined to comment. Multiply did not

respond to a request for comment.

Abu Dhabi-based investment holding company Multiply

is controlled by IHC, whose chairman is

Sheikh Tahnoon bin Zayed Al Nahyan, the UAE's national security

adviser and brother of the country's president who controls a

sprawling business empire.

District cooling plants, which deliver chilled water via

insulated pipes to cool offices, industrial and residential

buildings, have been developed as a more economical and

environmentally friendly alternative to air conditioning.

They are popular in the United Arab Emirates and elsewhere

in the Arabian Peninsula, where summer air temperatures can soar

above 50 degrees Celsius (122 Fahrenheit).

Founded in 2006, PCH has several plants in Abu Dhabi with a

combined design capacity of 242,000 refrigeration tonnes (RT),

according to its website.

It benefits from long-term agreements with clients including

developers Aldar and Reem Developers, which are

riding a construction boom across the Gulf country, including in

the capital city.

Tabreed's possible bid follows a deal announced last year

under which it was awarded the concession to provide district

cooling to Dubai's Palm Jebel Ali, a man-made palm-shaped island

double the size of the world-famous Palm Jumeirah.

Palm Jebel Ali, which is being re-developed after years of

inactivity due to a real estate crash, is projected to host over

80 luxury hotels and resorts and attract around 35,000 families.

Bloomberg had previously reported that Multiply was

considering selling the division and was working with Standard

Chartered ( SCBFF ) on the deal.