KEPPEL Corp : BN4 0% and Keppel Infrastructure Trust : A7RU 0% (KIT) are jointly investing 305 million euros (S$445.3 million) for a 50.01 per cent stake in a special purpose vehicle (SPV) that holds 50 per cent of an offshore wind farm in Germany, Borkum Riffgrund 2 (BKR2).

This comes after Keppel and KIT invested in onshore wind farm assets across Sweden and Norway, as announced in July.

The BKR2 SPV is currently wholly owned by a unit of Gulf Energy Development, one of Thailand’s largest private power producers, Keppel and KIT announced in a Friday (Aug 12) bourse filing. Post-acquisition, Gulf will retain a 49.99 per cent stake in the SPV.

The remaining 50 per cent stake in BKR2 is held by Orsted, a major provider of offshore wind power with over 30 years of experience.

Running since 2019, BKR2 has an operating capacity of about 465 MW and is located off the coast of Lower Saxony in the North Sea, Germany. The area has high wind availability, with high average historical capacity factors of more than 40 per cent.

The area is also next to the Wadden Sea, a Unesco World Heritage site, where wind farms are unlikely to be built. This mitigates the potential reduction in wind availability to BKR2, Keppel and KIT noted.

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They added that BKR2 operates under the German EEG 2014 market premium mechanism, which has a feed-in-tariff and guaranteed floor price till 2038, providing cash flow visibility for the project and de-risking the asset. The project also holds a 20-year power purchase agreement and a 20-year operations and maintenance agreement, until 2038, with Orsted.

Upon the completion of the investment, Keppel will have a total renewable energy portfolio of about 2.2 GW, including assets under development. The deal will also contribute to KIT’s target of increasing exposure to renewable energy assets by up to 25 per cent of equity-adjusted assets under management by 2030.

“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 Orsted through this transaction, and look forward to future collaboration opportunities,” said Keppel CEO Loh Chin Hua.

Jopy Chiang, CEO of KIT’s trustee-manager, added: “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.”

Keppel was trading at S$7.02 as at 10.19 am, up 0.3 per cent or S$0.02. KIT was up 1.8 per cent, or S$0.01, to S$0.585.