Keppel to invest S$233.6m in European onshore wind project

Keppel Corp and KIT will jointly invest in a 33.33% stake in FundCo.

Keppel Corporation and Keppel Infrastructure Trust (KIT) will jointly invest around S$233.6m (€160m) for a 33.33% share in the joint investment vehicle FundCo for the onshore wind energy assets and projects in Norway, Sweden, and the UK.

In a disclosure, Keppel said Norwegian pension fund Kommunal Landspensjonskasse, and global asset manager MEAG MUNICH ERGO Asset Management GmbH will also invest around S$233.6m (€160m) for a 33.33% stake in the FundCo.

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With this, FundCo will first co-invest in 49% of three operating wind farms in Sweden and Norway with a total generating capacity of 258 megawatts (MW). 

The remaining 51% will be held by Fred. Olsen Renewables AS (FORAS), which sponsors the energy projects in the three countries.

FundCo will also have a five-year exclusive right and obligation to co-invest in 49% of FORAS’ eligible pipeline of wind energy assets with 1.3 gigawatts capacity in Sweden and the UK when the final investment decision is achieved, with up to around S$700.8m (€480m) total capital commitment.

The proposed co-investment in the initial portfolio is expected to be completed by the third quarter of 2022. They said KIT is planning to fund its commitment of approximately S$191.6m (€131m) through the combination of internal sources of funds, proceeds from equity and/or debt capital market issuances and/or external borrowings. 

If all commitment is used, KIT’s enlarged portfolio will increase to S$4.7b from S$4.5b in March 2022.

They said the transaction marks Keppel Corporation’s expansion in the wind energy business and KIT’s first investment in the renewable energy sector. Upon the investment’s completion, the Keppel Group’s total renewable energy portfolio will reach around 1.8GW, including assets under development.