Keppel Infrastructure Trust unit secures $612.5 million green loan

SINGAPORE - Keppel Infrastructure Fund Management said a subsidiary of Keppel Infrastructure Trust has obtained a sustainability-linked loan of $612.5 million, and the proceeds will be used to refinance a loan.

According to the bourse filing the trustee-manager of Keppel Infrastructure Trust made on June 25, the interest cost of the loan is designed to incentivise the subsidiary, Keppel Merlimau Cogen, to produce energy efficiently and demonstrate its continued commitment to long-term sustainability and carbon-efficient performance.

Keppel Infrastructure Trust holds a 51 per cent stake in the subsidiary, with the remaining 49 per cent held by Keppel Energy.

The entire proceeds of the loan will be used to repay the outstanding $612.5 million portion of a loan that matures on June 30, 2027.

Under the green loan, the subsidiary will make payment of approximately equal debt-servicing amounts (principal and interest) every six months.

Conditions of the loan are such that if Keppel Infrastructure Fund Management stops being the trustee-manager and a majority-owned subsidiary of Keppel : BN4 0% is not the replacement as well as Keppel Energy does not acquire 51 per cent of the issued share capital of the borrower from Keppel Infrastructure Trust, the loan would become repayable.

Such a control change would lead to a cross-default under other borrowings of the trust and its subsidiaries, and may affect about $2.1 billion in aggregate level of facilities (excluding interest and fees).

Keppel Infrastructure Fund Management did not name the provider of the sustainability-linked loan in the filing.

Units of Keppel Infrastructure Trust closed 0.5 cent or 1.1 per cent lower at 47 cents on Junr 25, before the announcement. THE BUSINESS TIMES