Keppel Corporation and Keppel Infrastructure Trust (KIT) will be jointly investing €305.0 million ($445.3 million) to acquire a 50.01% stake in a special purpose vehicle (SPV) that holds 50% of Borkum Riffgrund 2 (BKR2), an offshore wind farm in Germany.
The SPV is currently wholly-owned by Gulf International Holding, which is a subsidiary of one of Thailand’s largest power producers, Gulf Energy Development Public Company Limited.
Gulf will retain a 49.99% stake in the SPV upon the completion of the acquisition.
Ørsted, the world’s leader in offshore wind power, owns the remaining 50% stake in BKR2.
BKR2 has been operating since 2019 and has an operating capacity of approximately 465 MW. It is located off the coast of Lower Saxony in the North Sea, Germany.
BKR2 operates under the German Renewable Energy Act (EEG) 2014 market premium mechanism, which has an attractive feed-in-tariff and guaranteed floor price till 2038, providing strong cash flow visibility for the project.
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Upon the completion of this investment, the group will have a total renewable energy portfolio of approximately 2.2 GW, including assets under development.
“The demand for renewable energy is expected to intensify as the world journeys towards its net zero goal. We are pleased to strengthen our partnership with best-in-class partners such as Gulf and Ørsted through this transaction, and look forward to future collaboration opportunities,” says Loh Chin Hua, CEO of Keppel Corp.
“This transaction is aligned with Keppel’s Vision 2030, which see renewables, clean energy and decarbonisation solutions playing increasingly integral roles as we make sustainability our business. It also demonstrates how we can harness the group’s eco-system and business networks to source for and capture opportunities to scale up in our focus areas and grow recurring income,” Loh adds.
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Jopy Chiang, CEO of KIT’s manager, says, “This will mark KIT’s first investment in an offshore wind farm, and our second investment in the European renewable energy market, further reinforcing our strategy to grow our energy transition segment and almost tripling KIT’s renewable energy portfolio to over 700 MW”.
“Underpinned by favourable tailwinds such as energy security, electrification and higher projected demand for green energy in the future, this investment underscores the global acceleration towards decarbonisation and net-zero. The trust will continue to make inroads to capture more opportunities in the renewable energy sector, in support of our ESG target,” he adds.
The acquisition is expected to be completed in the 4QFY2022.
Shares in Keppel Corp and KIT closed at $7.02 and 58.5 cents respectively on Aug 11.
