Keppel Core Infrastructure Fund Receives 39% of the equity of Wanliwang Thermal Power Plant

Keppel Ltd injects a 39% stake in a core power asset, Keppel Merlimau Cogen Plant, into its Keppel Core Infrastructure Fund as its first asset.

Keppel Infrastructure Trust, listed on SGX, will continue to hold 51% of the shares of Keppel Infrastructure Trust, and Keppel itself retains 10% of the shares. Before the transaction, Keppel held a 49% stake.

Keppel Core Infrastructure Fund will further expand its investment portfolio based on a mature asset and stable cash flow, Keppel Core Infrastructure Fund said.

Located in Jurong Island, Keppel Wanliwang Thermal Power Plant is a combined cycle gas turbine power plant with an installed capacity of 1,300 megawatts and supplies about 14% of Singapore electricity.

The power plant provides power generation capacity to Keppel's electricity retail business through a Capacity Tolling Agreement, which is responsible for power sales, while the power plant receives fixed capacity payments every month.

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Keppel statement said that under this arrangement, Keppel Core Infrastructure Fund can obtain stable cash flow and isolate the risk of price fluctuations of the fund in the Singapore wholesale power market; the agreement is valid until 2040.

Jee Kim, president of Keppel Core Infrastructure Fund, said he was pleased to provide fund investors with the opportunity to exclusively invest in Wanliwanghe, a core asset that is crucial to Singapore. “This transaction highlights the synergy between the fund and Keppel, and allows the fund to better grasp the growth opportunities of the infrastructure market in the Asia-Pacific region and provide the best risk-adjusted returns for limited partners.”

Huang Huiyun, managing director of Keppel Infrastructure Department (Electricity and Renewable Energy), said that as the operator of the Wanliwang Thermal Power Plant and the sponsor of the Keppel Core Infrastructure Fund and Keppel Infrastructure Trust, Keppel will continue to receive regular income and administrative expenses.