Keppel Infrastructure Trust to acquire 50% of Marina East Water from sponsor Keppel

Keppel Infrastructure Trust (KIT) will acquire a 50 per cent interest in Marina East Water from Keppel, with the proposed acquisition expected to be completed by the first quarter of 2025, it said on Monday (Nov 18).

Marina East Water, which owns the Keppel Marina East Desalination Plant, has an enterprise value of S$323 million.

When the acquisition is completed, KIT and Keppel are set to own a 50 per cent joint-controlling stake each in Marina East Water.

The trust said the purchase is expected to be accretive to its distribution per unit (DPU), with pro-forma DPU for FY2023 rising 0.4 per cent.

KIT’s assets under management will grow from S$8.7 billion as at Sep 30 to about S$9 billion upon the completion of the proposed acquisition, it added. The proposed acquisition has received in-principle approval from PUB.

KIT will get 100 per cent of the economic benefits from the Keppel Marina East Desalination Plant, while the facility’s operations and maintenance will continue to be carried out by Keppel’s infrastructure division until the end of the plant’s concession period in 2045.

Cindy Lim, chief executive of Keppel’s infrastructure division, said: “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.”

The Keppel Marina East Desalination Plant is Singapore’s fourth desalination plant and can treat both seawater and freshwater. It has a capacity of producing 137,000 cubic metres of fresh drinking water per day.

Units of KIT closed 2.2 per cent or S$0.01 lower at S$0.44 on Friday.