Keppel Infrastructure Trust to acquire 50% stake in Marina East Water

SINGAPORE: Keppel Infrastructure Trust (KIT) announced on Monday, 18 Nov, that it will acquire a 50% equity interest in Marina East Water (MEW), which owns the Keppel Marina East Desalination Plant.

Marina East Water has an enterprise value of S$323 million. The acquisition is expected to be completed by the first quarter of 2025, as reported by The Business Times.

Once the acquisition is finalised, KIT and Keppel will each own a 50% joint-controlling stake in MEW.

KIT stated that the purchase will be positive for its distribution per unit (DPU), with a projected 0.4% increase in DPU for the fiscal year 2023. Following the deal, KIT’s assets under management (AUM) will grow from S$8.7 billion to about S$9 billion.

The acquisition has received in-principle approval from Singapore’s Public Utilities Board (PUB).

KIT will receive all economic benefits from the Keppel Marina East Desalination Plant, while Keppel’s infrastructure division will remain responsible for the plant’s operations and maintenance until the concession period ends in 2045.

The Keppel Marina East Desalination Plant, Singapore’s fourth desalination facility, is capable of processing both seawater and freshwater. It has a daily production capacity of 137,000 cubic metres of fresh drinking water.

Cindy Lim, CEO of Keppel’s infrastructure division, said, “Since commencing commercial operations in June 2020, the Keppel Marina East Desalination Plant has consistently delivered strong availability and high-quality water.

With a proven track record of stable operational performance, the partial sale of our interest is aligned with Keppel’s capital recycling strategy and our commitment as a Sponsor of KIT to develop and contribute a pipeline of long-lived, stable-yield assets.”

On Friday, KIT’s units ended 2.2% lower, dropping by S$0.01 to close at S$0.44. /TISG

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