Interview: practitioners on urban heat & cooling solutions

The urban heat island mitigation market reached $4.2 billion in 2024 and is projected to surge to $9.8 billion by 2034—yet low-income countries experience 27% more severe daytime heat intensity increases than their wealthier counterparts, according to a 2025 Nature study on surface urban heat island effects. This disparity defines the challenge practitioners face: emerging markets bear the greatest burden from extreme urban heat while possessing the fewest resources to address it. In conversations with cooling infrastructure developers, climate finance specialists, and municipal officials across India, Southeast Asia, Africa, and Latin America, a consistent pattern emerges—the transition from successful pilots to citywide scale requires fundamentally different capabilities than those that launched initial projects. The playbook for scaling urban cooling in emerging markets is being written now, and its authors are learning hard lessons about what buyers actually require versus what pilot programs promised.

Why It Matters

Urban heat kills more people annually than any other weather-related phenomenon. The World Health Organization projects heat-related deaths will increase 50% by 2050, with emerging market cities bearing disproportionate mortality burdens due to limited air conditioning access, inadequate housing stock, and outdoor labor dependency. The economics are equally stark: the International Finance Corporation and UNEP's September 2024 "Cooler Finance" report identified an $8 trillion opportunity in sustainable cooling solutions for developing economies, with potential savings spanning reduced electricity demand, lower equipment costs, and avoided power infrastructure investments.

The 2024-2025 data reveals acceleration across multiple fronts. The radiative cooling technology market reached $39.2 billion in 2024 and projects growth to $106 billion by 2035, driven primarily by Asia-Pacific adoption. Africa's cooling market is forecast to grow sevenfold by 2050—the fastest regional expansion globally. India alone saw cool roof installations expand across Delhi's Kashmere Gate bus terminal, Chennai's affordable housing developments in Perumbakkam, and integration into Ahmedabad's formal Heat Action Plans.

For investors evaluating this space, the emerging markets context creates both opportunity and complexity. Surface urban heat island intensity increased an average of 0.021°C annually between 2003 and 2018 globally, but the distribution is uneven—lower-middle-income countries led nighttime heat intensity surges while low-income nations experienced the most substantial daytime increases. Urban heat island effects contribute 10-40% of observed warming in most cities, rising to 80% in areas experiencing rapid urbanization. The practitioners we interviewed emphasized that this scientific reality translates directly into buyer requirements: municipalities and developers increasingly demand cooling solutions that deliver measurable, verifiable temperature reductions rather than theoretical benefits.

Key Concepts

Urban Heat Island Effect describes the phenomenon where urban areas experience significantly higher temperatures than surrounding rural regions due to heat-absorbing materials (asphalt, concrete, dark roofing), reduced vegetation, waste heat from buildings and vehicles, and altered airflow patterns. Practitioners measure this through Surface Urban Heat Island Intensity (SUHII), comparing urban surface temperatures to rural baselines. The operational implication: cooling interventions must address multiple heat sources simultaneously rather than targeting single factors.

Cool Roofs and Reflective Surfaces represent the most cost-effective building-level intervention, using high-albedo materials to reflect solar radiation rather than absorbing it. Cool roofs reduce indoor temperatures by up to 6°C based on India pilot data and lower surface temperatures by 5-20°C depending on reflectivity levels. The technology commands 45% of the urban heat island mitigation market, with green roofs at 30% and urban forestry at 25%.

Operational Expenditure (OPEX) Models have emerged as critical enablers for emerging market adoption. Cooling-as-a-Service (CaaS) approaches—where customers pay monthly fees rather than upfront capital costs—now operate through 70+ companies in India alone. This shift from capital expenditure to operational expenditure removes the primary barrier preventing small and medium enterprises, agricultural operations, and low-income housing from accessing cooling infrastructure.

Corporate Sustainability Reporting Directive (CSRD) and related disclosure frameworks increasingly require companies to report climate adaptation measures, including cooling infrastructure investments. While CSRD applies primarily to European companies, its supply chain provisions affect emerging market suppliers and subsidiaries. Practitioners report growing buyer requirements for certified, measurable cooling performance data that satisfies these disclosure obligations.

Climate Resilience in cooling contexts refers to infrastructure and urban design that maintains thermal comfort during extreme heat events, power outages, and climate scenario uncertainties. Buyers increasingly specify resilience requirements—passive cooling that functions without electricity, redundant systems, and performance guarantees under projected 2050 temperature scenarios rather than historical baselines.

What's Working and What Isn't

What's Working

India's Heat Action Plan Integration demonstrates successful institutionalization of cooling interventions. Ahmedabad pioneered this approach following the 2010 heat wave that killed over 1,300 people. The city's Heat Action Plan now includes cool roof mandates for public buildings, early warning systems, and community outreach programs. Chennai extended this model by commissioning urban heat mapping to identify priority neighborhoods and integrating cool roof requirements into affordable housing master plans. Practitioners emphasize that municipal government ownership—rather than NGO or donor leadership—correlates strongly with sustained implementation.

Cooling-as-a-Service Financing removes upfront cost barriers that historically prevented adoption. Tata Power Trading launched CaaS offerings in October 2024, allowing Indian commercial and industrial customers to access efficient cooling without capital investment. The model mirrors solar power purchase agreements: providers own and maintain equipment while customers pay for cooling services delivered. Agricultural cold chain applications show particular promise, with CaaS enabling smallholder farmers to access post-harvest cooling that reduces food loss by 25-40%.

District Cooling Expansion in Southeast Asia offers efficiency gains impossible at building scale. Malaysia-based KJTS formed a $340 million joint venture with infrastructure investor Stonepeak in 2024, targeting Southeast Asian district cooling projects. District systems achieve 40-50% energy savings compared to individual building air conditioning by centralizing chiller operations, enabling thermal storage, and optimizing load management. Data center growth in Malaysia and Singapore provides anchor tenants that make district cooling economics viable for surrounding commercial and residential buildings.

What Isn't Working

Pilot Projects Without Transition Plans consistently fail to scale. Practitioners describe a common pattern: donor-funded demonstration projects achieve impressive results, generate favorable media coverage, then stall when grant periods end. The missing element is usually operational sustainability—pilots optimize for technical performance without building the revenue models, maintenance capabilities, or institutional relationships required for ongoing operation. One cooling technology developer noted that 60% of their successful pilots remained single installations five years later because "nobody planned for what happens after the ribbon cutting."

Technology-First Approaches Ignoring Local Context underperform expectations. Cool roof materials developed for Mediterranean or North American climates may not withstand monsoon conditions, high humidity, or locally available installation labor. Green roof systems requiring irrigation struggle in water-scarce regions. Practitioners report that adaptation to local conditions typically requires 12-18 months of iteration—time and cost rarely budgeted in initial project plans. The most successful implementations begin with climate analysis and material testing rather than importing proven solutions wholesale.

Fragmented Procurement Without Standards creates market dysfunction. Municipal buyers struggle to evaluate competing cooling solutions because performance metrics, testing protocols, and certification requirements vary widely. Vendors exploit this ambiguity through inflated claims. Several practitioners advocated for emerging regional standards—India's Bureau of Energy Efficiency cool roof specifications, for example—as essential infrastructure for market development. Until buyers can confidently compare options against consistent benchmarks, procurement decisions default to price rather than performance.

Key Players

Established Leaders

Tabreed (National Central Cooling Company) operates 1.4 million refrigeration tons of capacity across 90+ plants in the Gulf Cooperation Council region and signed a March 2024 memorandum of understanding with Germany's GIZ development agency to expand into India under the Energy Efficient Cooling program.

Emirates Central Cooling Systems Corporation (EMPOWER) holds over 80% of Dubai's district cooling capacity and was awarded contracts for the 48,000 refrigeration ton Jumeirah plant in 2024, maintaining its position as the world's largest district cooling provider.

Daikin Industries manufactures cooling equipment deployed across emerging markets and leads technology innovation in high-efficiency chillers and control systems, with significant market presence in India and Southeast Asia.

Saint-Gobain produces cool roofing materials and reflective coatings with substantial emerging market distribution, particularly in India where construction material supply chains reach smaller cities and towns.

Veolia operates solar-powered chiller installations in Dubai and brings water-energy nexus expertise to integrated cooling solutions, particularly relevant for district cooling systems requiring water management capabilities.

Emerging Startups

KJTS (Malaysia) formed a $340 million joint venture with Stonepeak in 2024 targeting Southeast Asian district cooling projects, representing the largest dedicated emerging market cooling infrastructure investment announced that year.

Tata Power Trading launched Cooling-as-a-Service offerings in October 2024, leveraging existing customer relationships and grid infrastructure to deliver subscription-based cooling to Indian commercial and industrial customers.

Sojitz Corporation and FAS Energy Joint Venture entered the Saudi Arabian market in May 2024, marking Japanese investment in Middle Eastern district cooling expansion aligned with Vision 2030 sustainability goals.

Rocky Mountain Institute (India operations) partners with state governments on cool roof programs, providing technical assistance for Chennai's affordable housing initiative and developing replicable implementation models for other Indian cities.

ADC Energy Systems (UAE) develops smaller-scale district cooling networks suitable for densely populated urban areas, addressing a market segment between individual building systems and mega-project district infrastructure.

Key Investors & Funders

Stonepeak committed $340 million to the KJTS joint venture in 2024, reflecting infrastructure investor appetite for emerging market cooling assets with long-term contracted revenue streams.

International Finance Corporation (IFC) committed $56 billion to private companies and financial institutions in developing countries during fiscal 2024, with sustainable cooling identified as a priority sector in their September 2024 "Cooler Finance" report.

GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) provides development finance and technical assistance for cooling programs, including the Tabreed India expansion memorandum and broader Energy Efficient Cooling initiatives.

Breakthrough Energy Ventures has invested over $2 billion in climate technology including cooling-adjacent solutions, with portfolio companies addressing building efficiency, refrigerants, and thermal management.

Asian Development Bank finances urban infrastructure across emerging Asia, with cooling components increasingly integrated into smart city, affordable housing, and climate resilience lending programs.

Examples

Chennai Perumbakkam Affordable Housing Cool Roofs: Tamil Nadu's government partnered with Rocky Mountain Institute and UNEP to implement cool roofs across affordable housing developments in Perumbakkam, a Chennai neighborhood housing 20,000+ relocated families. The project conducted comprehensive urban heat mapping to identify thermal hotspots, then applied high-reflectivity coatings targeting 4°C indoor temperature reduction. Initial monitoring data confirmed surface temperature reductions of 15-20°C on treated roofs compared to conventional surfaces. The project's integration into Chennai's master plan ensures cool roof specifications apply to future affordable housing construction, scaling impact beyond the pilot footprint.

Delhi Kashmere Gate Bus Terminal: UNEP's Cool Coalition partnered with Delhi government agencies to install cool roof treatments at the Kashmere Gate integrated transit hub, serving hundreds of thousands of daily commuters. The intervention targets waiting areas and platforms where heat exposure risks are highest. Practitioners note the project's significance lies in demonstrating cool roof viability for transportation infrastructure—a building category often overlooked in favor of residential and commercial applications. Measured performance data will inform specifications for Delhi's broader transit infrastructure portfolio.

Ahmedabad Heat Action Plan Evolution: Ahmedabad's Heat Action Plan, launched following the 2010 heat wave, has evolved from emergency response protocols to comprehensive urban cooling strategy. The plan now incorporates cool roof mandates for municipal buildings, partnerships with private developers for voluntary adoption, and integration with monsoon action planning to address flooding and heat sequentially. Over 12 million square feet of cool roofs have been installed across the city. The municipal corporation reports measurable reductions in heat-related hospital admissions during extreme heat events, though attribution to specific interventions remains methodologically challenging.

Action Checklist

• Conduct urban heat mapping before selecting intervention sites—thermal imaging and sensor networks identify priority neighborhoods where cooling investments deliver greatest health and economic returns
• Specify performance requirements rather than technology prescriptions in procurement documents—allow vendors to propose solutions meeting temperature reduction, energy efficiency, and durability standards
• Require third-party verification of claimed cooling performance using standardized testing protocols—India's Bureau of Energy Efficiency specifications or ASTM International standards provide credible benchmarks
• Structure financing through operational expenditure models (CaaS, leasing, power purchase agreement equivalents) to remove upfront capital barriers that prevent adoption by small enterprises and low-income communities
• Integrate cooling investments into existing municipal planning processes—Heat Action Plans, master plans, building codes—rather than creating parallel implementation structures
• Budget for 12-18 months of local adaptation and iteration when introducing cooling technologies developed in different climate contexts—monsoon durability, humidity performance, and installation labor training require time
• Establish maintenance protocols and spare parts supply chains before declaring pilot success—cooling systems require ongoing operational attention that grant-funded projects often neglect
• Document performance data in formats compatible with CSRD and other disclosure frameworks—buyers increasingly require certified metrics for sustainability reporting compliance
• Engage commercial anchor tenants (data centers, hospitals, hotels) to establish district cooling economics before extending service to residential and small commercial customers
• Build relationships with local government officials who control building permits, zoning, and public procurement—municipal support determines whether successful pilots scale citywide

FAQ

Q: What cooling technologies deliver the best return on investment in emerging markets? A: Cool roofs consistently offer the highest ROI for building-level interventions, with payback periods of 2-5 years depending on local electricity costs and cooling loads. Installation costs range from $2-8 per square meter for coating applications, while indoor temperature reductions of 4-6°C translate directly into reduced air conditioning demand or improved thermal comfort in non-air-conditioned buildings. District cooling delivers superior efficiency at scale but requires anchor tenants and infrastructure investment that limits applicability to dense urban developments. Urban tree planting provides cooling benefits of approximately 1-2°C but operates on longer timelines (5-15 years to maturity) and requires sustained maintenance funding.

Q: How do practitioners address the tension between immediate cooling needs and long-term climate resilience? A: The most sophisticated practitioners design for both simultaneously by specifying passive cooling elements that function without electricity alongside active systems for extreme conditions. Cool roofs, shading structures, and natural ventilation reduce baseline cooling loads while efficient air conditioning or district cooling handles peak demand. Resilience requirements increasingly appear in buyer specifications: performance guarantees under projected 2050 temperature scenarios, backup power for critical cooling loads, and materials rated for climate stresses beyond historical experience. Practitioners caution against optimizing solely for current conditions when infrastructure lifetimes extend 20-40 years into a warming climate.

Q: What role do international disclosure frameworks like CSRD play in emerging market cooling investments? A: CSRD directly regulates European companies but affects emerging market suppliers through value chain provisions requiring climate adaptation disclosure. Multinational buyers increasingly demand certified cooling performance data from emerging market facilities to satisfy their own reporting obligations. Practitioners report that CSRD-aligned documentation requirements are becoming de facto standards for export-oriented manufacturing, commercial real estate serving international tenants, and infrastructure projects seeking multilateral development bank financing. The practical implication: emerging market cooling investments should generate performance data in formats compatible with international disclosure frameworks even when local regulations do not require such documentation.

Q: How can investors evaluate cooling technology claims when standards remain fragmented? A: Due diligence should emphasize reference installations over laboratory test results. Request access to operating projects in comparable climates with at least 12 months of performance data spanning full seasonal cycles. Verify that claimed temperature reductions account for measurement methodology—surface temperature reductions of 15-20°C are typical for cool roofs, but indoor air temperature reductions of 4-6°C represent the metric affecting occupant comfort and energy consumption. Assess maintenance requirements and local service capability; technologies requiring specialized maintenance in markets lacking trained technicians create operational risks that erode theoretical performance advantages. Prioritize vendors who have navigated local adaptation challenges rather than those deploying unmodified products developed for different contexts.

Q: What distinguishes pilots that scale from those that remain isolated demonstrations? A: Scalable pilots embed transition planning from project inception. This includes identifying sustainable revenue models (tariffs, property tax assessments, inclusion in utility bills), training local maintenance personnel, establishing supply chains for replacement materials, and building relationships with municipal officials who control permitting and procurement. Pilots that remain demonstrations typically optimize for technical performance and visibility without addressing operational sustainability. Practitioners recommend requiring pilot proposals to include explicit scale-up budgets, timelines, and success criteria—treating the pilot as the first phase of a multi-phase program rather than a standalone project.

Sources

• International Finance Corporation and UNEP, "Cooler Finance: Mobilizing Investment for the Developing World's Sustainable Cooling Needs," September 2024
• Nature, "Surface urban heat island effects intensify more rapidly in lower income countries," npj Urban Sustainability, January 2025
• World Resources Institute, "As the Earth Gets Hotter, Can Infrastructure Cool Cities?," 2024
• Global Insight Services, "Urban Heat Island Mitigation Market Size, Growth, Trends and Forecast," 2024
• MarketsandMarkets, "District Cooling Market Size, Share, Industry Report 2030," 2024
• Sustainable Energy for All, "Chilling Prospects 2022: Urban land-use and heat analysis in major cities," 2024
• PNAS, "Global urban greening and its implication for urban heat mitigation," 2025
• Spherical Insights, "Top 50 Companies in Radiative Cooling Technology Market," 2024-2035 Strategic Overview