Keppel and Keppel Capital consortium to acquire majority of Cleantech for up to US$150M

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

Keppel Corp., Keppel Asia Infrastructure Fund (KAIF) and a KAIF co-investor, via Cloud Alpha, are acquiring a 51 percent stake in Cleantech Renewable Assets for up to US$150 million, according to a filing to SGX Monday.

The consideration is US$130 million, plus up to US$20 million in earn-out payments subject to performance milestones, the filing said.

Cleantech is a solar energy platform focused on commercial and industrial services, with a total capacity of more than 600 megawatts across assets in India and six Southeast Asian countries, the filing said, adding the company is targeting 3 gigawatts of capacity over the next five years.

“On the back of various commitments undertaken by nations and companies towards achieving Net Zero targets, Cleantech is expected to benefit from the growing demand for renewable energy in the region,” Keppel said in the statement.

Cleantech has around 120 customers, with around 95 percent in five energy-intensive sectors: auto, industrial, consumer and retail, energy and chemicals and textiles, with customers including Apollo Tyres, Cargill, Coca-Cola, Shell Lubricants and Akzo Nobel, the filing said.

Loh Chin Hua, CEO of Keppel Corp., said the acquisition opened up opportunities for collaboration with other parts of Keppel Group.

“Through acquiring a majority stake in an established platform together with KAIF and a like-minded investor, we would be able to accelerate Keppel’s growth in the renewables space, as we work towards achieving and surpassing our target of 7GW of renewable energy assets by 2030,” Loh said in the statement.

Around 60 percent of Cloud Alpha is indirectly held by by Keppel via its wholly owned subsidiary Keppel Renewable Investments, while the remainder is held indirectly by KAIF and the co-investor of KAIF, the filing said.

KAIF, which reached its final close this year, is managed by Keppel Capital Alternative Asset, a private fund manager under Keppel Capital. The KAIF partnership and its co-investment vehicles have total commitments of around US$1 billion from global institutional investors, the filing said.

KAIF’s Cleantech investment is its first renewable energy investment, and it plans further forays into Asia Pacific’s solar energy sector, the filing said.

The fund and its co-investment vehicles have a 30 percent interest in the Gimi floating LNG facility, currently undergoing conversion by Keppel Offshore & Marine, the filing said.

Shell Eastern Petroleum will continue to hold the remaining 49 percent of Cleantech, the filing said.

The deal is expected to close in the first quarter of 2022, the filing said.