Keppel Infrastructure Trust to take 50% stake in owner of Marina East desalination plant

SINGAPORE (THE BUSINESS TIMES) – Keppel Infrastructure Trust (KIT) has entered into a non-binding term sheet to purchase from its sponsor a 50 per cent stake in Marina East Water (MEW), which owns the Keppel Marina East Desalination Plant (KMEDP), for an enterprise value of about $355 million.

Post-transaction, KIT and its sponsor, Keppel Infrastructure Holdings, will each hold a 50 per cent joint controlling stake in MEW, the trust said on Thursday (June 30) in a bourse filing after trading hours. KIT will receive all of the economic interest from MEW.

KMEDP is Singapore’s fourth desalination plant and the first and only large-scale, dual-mode plant here that can treat seawater or rainwater drawn from the Marina Reservoir. It can produce 137,000 cubic m of fresh drinking water a day.

The plant began commercial operations on June 29, 2020, and has a 25-year concession, from 2020 to 2045, under a design, build, own and operate arrangement with national water agency PUB.

Mr Jopy Chiang, chief executive of KIT’s trustee-manager, said that the strategic addition of KMEDP to the portfolio is expected to support unit holders’ overall distributable income per unit.

He said: “KMEDP is a stellar asset from our sponsor that will add to KIT’s green credentials, reinforcing our commitment to invest in high-quality and energy-efficient assets.

“Besides being one of the key assets contributing to Singapore’s water resilience, KMEDP has a long-term contract with a strong counterparty, which will improve KIT’s cash flow visibility.”