Quick Read
- Keppel Infrastructure Trust will acquire a 39% stake in the KMC plant for S$128.1 million.
- The transaction increases the trust’s total ownership of the 1,300-megawatt facility to 90%.
- Analysts suggest the acquisition will provide stable, income-generating cash flows, with potential unit price upside of 11%.
SINGAPORE (Azat TV) – Keppel Infrastructure Trust (KIT) has announced a significant expansion of its energy portfolio, confirming an agreement to acquire an additional 39 per cent stake in the Keppel Merlimau Cogen (KMC) plant located on Jurong Island. The transaction, valued at up to S$128.1 million, brings the trust’s aggregate interest in the 1,300-megawatt facility to 90 per cent.
Consolidating core energy infrastructure
The acquisition marks a strategic push by Keppel Infrastructure Trust to deepen its hold on stable, income-producing assets. According to reports from The Business Times, the deal follows an announcement made on Monday, May 4, 2026. By increasing its ownership to 90 per cent, the trust effectively secures majority control over one of Singapore’s critical power generation facilities, which serves as a cornerstone of its infrastructure holdings.
Financial impact and market outlook
Market analysts have noted the accretive nature of the divestment for the parent entity, Keppel Ltd, which will retain a 10 per cent residual stake in the plant. According to a research note from Lim & Tan Securities, the divestment is expected to bolster Keppel Ltd’s pro forma net tangible assets per share and earnings per share, while providing KIT with a more concentrated revenue stream from the KMC plant. Following the announcement, market participants have maintained a positive outlook on the trust, with some analysts setting a target price of S$0.60 per unit, representing an 11 per cent upside potential.
Strategic significance of the Jurong facility
The Keppel Merlimau Cogen plant remains a vital component of Singapore’s energy infrastructure. The facility’s capacity to provide consistent power generation makes it a high-value asset in the current economic environment, where energy costs remain a primary concern for industrial and commercial stakeholders. By integrating this additional interest, KIT aims to enhance the long-term visibility and stability of its distributions to unitholders.
The consolidation of ownership in the KMC facility signals a clear shift toward asset-heavy, defensive infrastructure strategies as market volatility persists, suggesting that Keppel Infrastructure Trust is prioritizing predictable cash flows over capital-intensive expansion in the current high-cost environment.