Keppel Infrastructure Fund Management Pte. Ltd. (KIFM), as Trustee-Manager of Keppel Infrastructure Trust (KIT) is committing up to €109m ($119.81 million) to acquire a 45 percent effective stake in German renewable energy (RE) firm Enpal B.V. (Enpal)’s solar portfolio (AssetCos) through a special purpose vehicle (SPV).

KIT said in a statement on Thursday that it will hold a 50 percent stake in the SPV where the other 50 percent stake is held by Equitix Investment Management Limited (Equitix) and its co-investors.

The SPV will acquire a 90 percent stake in Enpal’s solar portfolio with Enpal retaining the remaining 10% stake.

The portfolio is projected to include over 60,000 bundled solar photovoltaic (PV) systems across Germany with a projected combined generation capacity of 585 MW.

The bundled PV solutions are also projected to include more than 55,000 battery storage systems and more than 30,000 electric vehicle charging equipment.

These bundled solutions are leased to households under 20-year lease agreements and will provide highly predictable cash flows to KIT.

Post-acquisition, the monitoring and maintenance of the PV systems will continue to be handled by Enpal under 20-year agreements with the AssetCos.

The acquisition of Enpal’s portfolio will take place in four phases.

The first closing consisting of over 53,500 systems is expected to be completed by end-2023, and the remaining three closings comprising over 6,500 systems by end-June 2024.

“We are very excited to participate in the growing adoption of solar energy, and to expand our presence in Germany’s burgeoning renewable energy sector, which is propelled by the country’s ambition to achieve carbon neutrality by 2045,” said Kevin Neo, Chief Executive Officer of KIFM.

According to him, the firm’s investment in Enpal’s substantial home solar portfolio marks KIT’s first acquisition in the solar energy sector and will expand its exposure to renewables beyond onshore and offshore wind.

“Connected by an intelligent renewable network that supports a highly efficient energy delivery model, Enpal’s solar portfolio will provide strong and stable earnings visibility to bolster KIT’s distributions to unitholders, as we grow KIT’s investments in renewables to 25 percent of asset under management (AUM) by 2030,” he added.

KIFM intends to fund the investment with internal sources of funds and/or external borrowings.

Upon completion of the transaction, KIT’s AUM will grow from SGD 7.3 billion ($5.5 billion) as at FY 2022 to approximately SGD 8.4 billion ($6.33 billion), with renewable energy making up 22 percent of the total AUM.

Enpal is Germany’s first green tech unicorn and is among some of the largest residential solar installers and fastest-growing energy companies in Europe, installing over 2,500 new solar energy systems monthly.

The firm has been benefiting from increasing demand for solar power systems, with consumers seeking alternatives as Germany reduces its reliance on fossil fuels.

Enpal’s renewable energy solutions are appealing to German households as they allow homeowners to install PV systems, batteries, and EV chargers without incurring high upfront costs.

It is generally cheaper for households to lease the energy systems from Enpal compared to buying electricity from the grid.

Furthermore, the households are also able to sell any excess electricity generated to the grid at an attractive feed-in-tariff.

The company, which has been profitable since 2022, maintains its leading market position for solar power systems for private use in Germany with the sale of several thousand new energy systems every month.

The firm is supported by the world’s largest impact and technology investors such as TPG Rise Climate, Softbank Vision Fund II, Princeville Climate Technologies and The Westly Group.

KIT is a diversified business trust listed on the Singapore Exchange. Its goal is to deliver sustainable and growing returns to Unitholders, through a combination of recurring distributions and capital growth.

KIT’s portfolio of strategic infrastructure businesses and assets provide essential products and services to a wide array of customers including government agencies, multinational corporations, commercial and industrial enterprises as well as retail consumers.

KIT is sponsored by Keppel, a global asset manager and operator with strong expertise in sustainability related solutions spanning the areas of infrastructure, real estate and connectivity.

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