SINGAPORE - The trustee-manager of Keppel Infrastructure Trust (KIT) is committing up to €109 million (S$159 million) to acquire a 45 per cent stake in a solar portfolio from Enpal, Germany’s first green-tech unicorn.

Enpal is among some of the largest residential solar installers and fastest-growing energy companies in Europe, installing more than 2,500 new solar energy systems monthly, KIT’s trustee-manager said.

Given that the solar solutions are bundled and leased to households under 20-year lease agreements, the acquisition will bring some “highly predictable cash flows” to KIT, it highlighted.

The trustee-manager’s chief executive officer, Mr Kevin Neo, noted in particular that the portfolio “will provide strong and stable earnings visibility to bolster KIT’s distributions to unit holders, as we grow KIT’s investments in renewables to 25 per cent of assets under management (AUM) by 2030”.

Announcing this in a bourse filing on Dec 21, the trustee-manager said that it intends to fund the investment with internal sources or external borrowings. 

Upon completion of the transaction, KIT’s AUM will grow from $7.3 billion as at end-2022 financial year to about $8.4 billion, with renewable energy making up 22 per cent of the total AUM, it noted.

The portfolio is projected to include more than 60,000 bundled solar photovoltaic (PV) systems across Germany with a projected combined generation capacity of 585MW.

The bundled PV solutions are also projected to include more than 55,000 battery storage systems and more than 30,000 electric vehicle charging equipment.

The purchase will be made through a special purpose vehicle, in which KIT will hold a 50 per cent stake. The other 50 per cent stake is held by Equitix Investment Management and its co-investors. 

The special purpose vehicle will acquire a 90 per cent stake in Enpal’s solar portfolio, with Enpal retaining the remaining 10 per cent stake.

Despite the acquisition, the monitoring and maintenance of the PV systems will continue to be handled by Enpal under 20-year agreements, the trustee-manager said.

It said the acquisition will take place in four phases. 

The first closing, consisting of more than 53,500 systems, is expected to be completed by end-2023. The remaining three closings, comprising more than 6,500 systems, are expected to be completed by end-June 2024.

Mr Neo said that the investment in Enpal’s home solar portfolio marks KIT’s first acquisition in the solar energy sector. KIT’s exposure to renewables is currently in onshore and offshore wind.

“We are very excited to participate in the growing adoption of solar energy, and to expand our presence in Germany’s burgeoning renewable energy sector, which is propelled by the country’s ambition to achieve carbon neutrality by 2045,” Mr Neo added.

Units of KIT closed up 1 per cent, or 0.5 cent, at 49.5 cents before the announcement on Dec 21. THE BUSINESS TIMES