This study investigates the feasibility of transitioning from a seawater-based cooling system to a closed-loop freshwater cooling system in chilled water plants of Naval ships. Seawater systems, while historically efficient, face significant challenges such as biofouling, corrosion, and inefficiencies due to high seawater temperatures, especially in middle east climate. These challenges increase maintenance demands, operational downtime, and lifecycle costs, compromising long-term system sustainability and environmental concerns. Three system modification options were analyzed: downsizing the condenser and integrating a chilled water line, adding a heat exchanger and storage tank, and adding a heat exchanger and accumulator. Among these, the option featuring a heat exchanger and thermal buffer tank (Option 2) emerged as the most feasible for a complete system replacement. It offers enhanced operational stability, reduced maintenance demands, and significant long-term cost savings despite a higher initial investment. The findings underscore the strategic advantages of Option 2, highlighting its adaptability to existing infrastructure, long-term cost savings, and alignment with sustainability goals. The study demonstrates that a closed-loop freshwater cooling system provides substantial improvements in energy efficiency and environmental sustainability. By eliminating seawater dependency, the proposed system reduces maintenance requirements, improves lifecycle performance, supporting clean water usage, energy efficiency, and reduced emissions. While the initial investment is higher, the projected return on investment within 4-6 years and significant lifecycle cost reductions establish it as a viable and future-proof solution.