Keppel Corp in consortium to acquire majority stake in solar platform for up to US$150m

A CONSORTIUM of Keppel Corporation BN4 , Keppel Asia Infrastructure Fund LP (KAIF) and a co-investor of KAIF, through Cloud Alpha, is acquiring a 51 per cent equity interest in Cleantech Renewable Assets for up to US$150 million.

The remaining 49 per cent of the equity interest in Cleantech is held by its existing shareholder, Shell Eastern Petroleum, which will continue to support its future growth in the region.

Headquartered in Singapore, Cleantech is a solar energy platform with a total capacity of over 600 megawatts across the various stages of operations, construction, and development. Its assets are located across India, Thailand, Malaysia, Indonesia, Cambodia, Singapore and Vietnam.

Cleantech is targeting to achieve a cumulative generation capacity of 3 gigawatts over the next 5 years.

Loh Chin Hua, chief executive officer of Keppel Corporation, said in a press statement on Monday (Dec 13) that the investment reflects Keppel's commitment to sustainability and its Vision 2030 plans to grow its renewables business.

"Through acquiring a majority stake in an established platform together with KAIF and a like-minded investor, we would be able to accelerate Keppel's growth in the renewables space, as we work towards achieving and surpassing our target of 7 gigawatts of renewable energy assets by 2030," said Loh.

Keppel noted that Cleantech has strong and proven in-house capabilities for project development, engineering, procurement, construction, asset management and financing of solar facilities

"On the back of various commitments undertaken by nations and companies towards achieving net zero targets, Cleantech is expected to benefit from the growing demand for renewable energy in the region," said Keppel.

Cleantech has around 120 creditworthy and top-tier customers across energy intensive sectors including auto, industrial, consumer and retail, energy and chemicals, and textile. These companies include the likes of Apollo Tyres, Cargill, Coca Cola, Shell Lubricants, Akzo Nobel, Kerry Ingredients, Kuehne + Nagel, among others.

KAIF is managed by Keppel Capital Alternative Asset, a private fund manager under Keppel Capital. Launched in January 2020, the KAIF Partnership and its co-investment vehicles have aggregate commitments of approximately US$1 billion from global institutional investors.

Completion of the transaction is subject to and conditional upon conditions including regulatory and other approvals. The transaction is expected to close in the first quarter next year.

The transaction is not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corporation for the financial year ending Dec 31, 2021.

Shares of Keppel ended Monday at S$5.18, down S$0.06 or 1.2 per cent.