KIT, Keppel Energy nab $700m sustainability-linked loan

This will be used for its jointly owned gas-fired cogeneration plant.

Keppel Infrastructure Trust (KIT) and Keppel Energy (KE) have secured a seven-year $700m sustainability-linked loan from DBS Bank and OCBC Bank through a joint venture, according to an announcement.

This will be used for its jointly owned gas-fired cogeneration plant, Keppel Merlimau Cogen Plant. The loan will be used to achieve the plant’s carbon emission targets, including benchmarking and continuous improvement of the plant’s carbon emissions intensity.

The transaction is said to be one of the largest sustainability-linked loans in Singapore and marks KIT and KE’s maiden sustainability-linked loan.

The companies added that key initiatives for this include the implementation of a water management plan at City Gas, introduction of drones for equipment inspection at selected Ixom HoldCo (Ixom) facilities, improving efficiency and safety levels, as well as the development of a smart chemical handling system at Keppel Merlimau Cogen Plant.

Keppel Infrastructure Fund Management CEO and KIT trustee-manager Matthew Pollard said that the loan facility will help the company proactively drive best practices as well as support the performance of Keppel Merlimau Cogen Plant.

The transaction is not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited and Keppel Infrastructure Trust for the current financial year.