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Keppel, Keppel Infrastructure Trust to invest $445m in German offshore wind farm

SINGAPORE – Keppel Corp and Keppel Infrastructure Trust (KIT) said on Friday (Aug 12) that they will spend €305 million (S$445.3 million) to acquire a 25 per cent stake in Borkum Riffgrund 2, an offshore wind farm in Germany.

It is their second joint investment in renewable energy assets and reinforces KIT’s strategy to grow its energy transition business.

The acquisition will be made via a 50.01 per cent stake in a special purpose vehicle (SPV) that owns 50 per cent of the wind farm. It will result in KIT taking an effective 20.5 per cent stake in the wind farm, while Keppel Corp will hold a 4.5 per cent interest.

The SPV is currently wholly owned by Gulf International Holding, a unit of Gulf Energy Development Public Company Limited, one of Thailand’s largest private power producers.

The other 50 per cent of Borkum Riffgrund 2 is held by Danish renewables firm Orsted, which has 30 years of experience in developing offshore wind farms.

Fully operational since 2019, the wind farm has an operating capacity of approximately 465 megawatts (MW) and is located 59km off the coast of Lower Saxony in the North Sea, an area with high wind availability, Keppel Corp and KIT’s trustee-manager said in a statement on Friday.

As the region is next to the Wadden Sea, an Unesco World Heritage site, it is unlikely for wind farms to be built in the Wadden Sea, mitigating potential reduction in wind availability to the wind farm, they added.

Germany has committed to phasing out coal and nuclear power and in February brought forward its 100 per cent renewables target by 15 years to 2035.

Companies are acquiring or developing more renewable energy assets amid the global push towards clean and sustainable energy.

Keppel Corp and KIT announced in July their €160 million investment in onshore wind farm assets across Sweden and Norway.

The latest acquisition, once completed, will boost Keppel’s renewable energy portfolio to about 2.2 gigawatts and triple KIT’s portfolio to more than 700MW.

Keppel said it will fund its share of the deal through capital contributions to the joint venture, while KIT will pay for the investment with a combination of internal funds, equity, debt and external borrowings.

The deal is expected to be completed in the fourth quarter of 2022.