Keppel Infrastructure Trust (KIT) has announced that it will commit up to EUR109 million ($158.9 million) to acquire a 45% effective stake in a solar portfolio from German renewable energy company Enpal B.V.
KIT’s first solar investment in Enpal’s solar portfolio, AssetCos, through a special purpose vehicle (SPV) will double its renewable energy exposure to 22% of its assets under management (AUM), a significant step towards its 25% AUM target by 2030.
KIT will hold a 50% stake in the SPV with the other 50% stake held by Equitix Investment Management and its co-investors. The SPV will acquire a 90% stake in Enpal’s solar portfolio with Enpal retaining the remaining 10% stake.
Enpal is Germany’s first green tech unicorn and is among some of the largest residential solar installers and fastest-growing energy companies in Europe, installing over 2,500 new solar energy systems monthly.
AssetCos is projected to include over 60,000 bundled solar photovoltaic (PV) systems across Germany with a projected combined generation capacity of 585 megawatts (MW). The bundled PV solutions are also projected to include more than 55,000 battery storage systems and more than 30,000 electric vehicle charging equipment.
These bundled solutions are leased to households under 20-year lease agreements and will provide highly predictable cash flows to KIT, says the trust.
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The acquisition of Enpal’s portfolio will take place in four phases, with the first closing consisting of over 53,500 systems expected to be completed by end-2023, and the remaining three closings comprising over 6,500 systems by end-June 2024.
Post-acquisition, the monitoring and maintenance of the PV systems will continue to be handled by Enpal under 20-year agreements with AssetCos.
Kevin Neo, CEO of Keppel Infrastructure Fund Management (KIFM), says: “We are very excited to participate in the growing adoption of solar energy, and to expand our presence in Germany’s burgeoning renewable energy sector, which is propelled by the country’s ambition to achieve carbon neutrality by 2045. Our investment in Enpal’s substantial home solar portfolio marks KIT’s first acquisition in the solar energy sector and will expand our exposure to renewables beyond onshore and offshore wind.”
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“Connected by an intelligent renewable network that supports a highly efficient energy delivery model, Enpal’s solar portfolio will provide strong and stable earnings visibility to bolster KIT’s distributions to unitholders, as we grow KIT’s investments in renewables to 25% of AUM by 2030,” he adds.
KIFM, the trustee-manager of KIT, intends to fund the investment with internal sources of funds and/or external borrowings. Upon completion of the transaction, KIT’s AUM will grow from $7.3 billion as at FY2022 to approximately $8.4 billion, with renewable energy making up 22% of the total AUM.
Units in KIT closed 0.5 cents higher or 1.02% up at 49.5 cents on Dec 21.
