Singapore-based Keppel Ltd., through its connectivity division, has signed an indefeasible right of use (IRU) agreement with a global leading hyperscaler for the final remaining fiber pair on the Bifrost Cable System (Bifrost).
With this agreement, all five fiber pairs in Keppel’s Bifrost portfolio have been committed, at an estimated total contract value of approximately $1.3 billion, including stable recurring income from cable operations and maintenance over 25 years, Keppel said in a statement on Tuesday.
The five fiber pairs have been committed to a set of diverse customers including major telecommunications operators, leading hyperscalers and global technology companies.
Overall, the Bifrost project is expected to generate an internal rate of return of about 30 percent for Keppel as well as its private fund investors.
“The successful commercialisation of all five of Keppel’s fibre pairs on Bifrost is a strong validation of our ability to originate, develop, operate and crystalise value from proprietary digital infrastructure assets,
“It demonstrates how our integrated ecosystem creates differentiated connectivity solutions that customers value, while delivering attractive returns to our limited partners and Keppel as a co-investor, and generating long-term recurring income through both our asset management and operating platforms,” said Manjot Singh Mann, Chief Executive Officer, Connectivity of Keppel.
He also said that building on this track record, together with the firm’s private funds and listed trusts, they are pursuing and evaluating two new cable systems, one from Singapore to the Middle East with branches across South Asia, and the other from Singapore to Japan through the South China Sea with branches across ASEAN.
“By harnessing our capabilities across digital infrastructure, including data centers and power, we are well positioned to support the next wave of artificial intelligence (AI)-driven digital growth,” he added.
Bifrost is the world’s first subsea cable system directly linking Singapore to the west coast of United States via Indonesia through the Java Sea and Celebes Sea.
Spanning over 20,000 km, Bifrost supports AI and cloud-native workloads and provides over 240 Tbps of additional trans-Pacific capacity, enhancing the resilience of this critical digital corridor.
In line with Keppel’s asset-light business model, the company’s investment in the Bifrost fiber pairs is held through a 40-60 joint venture with its private fund co-investors.
The successful commercialization of Bifrost demonstrates Keppel’s ability to originate, finance, develop and operate capital-intensive digital infrastructure through its integrated business model as a global asset manager and operator.
Bringing together capabilities across subsea connectivity, including cable installation and maintenance, as well as data centers, power, cooling and water solutions, Keppel said the firm is well positioned to deliver end-to-end digital infrastructure solutions that support the growth of AI, cloud computing and digitalization.
The above-mentioned agreement is not expected to have any material impact on the net tangible asset per share or earnings per share of Keppel Ltd. for the current financial year, said the statement.
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