10 June 2024

Allen & Gledhill is advising Keppel Infrastructure Trust (“KIT”), through its trustee-manager, Keppel Infrastructure Fund Management Pte Ltd., on their proposed agreement with the Infrastructure Division of Keppel Ltd. (“Keppel”) to amend and extend the Capacity Tolling Agreement (“CTA”) for the Keppel Merlimau Cogen (“KMC”) Plant by ten years, from 2030 to 2040. The amended and extended CTA is expected to generate up to S$1.08 billion in long term capacity payments for KMC.

The KMC Plant is a combined cycle gas turbine power plant with a generation capacity of approximately 1,300 MW, situated on Jurong Island, Singapore, and was the first independent power project to enter the Singapore electricity market since the implementation of the National Electricity Market of Singapore in January 2003.

With the extension of the CTA, KIT can further tap Keppel’s operating capabilities to undertake enhancements to the KMC Plant that will improve its emissions intensity and allow it to contribute to the decarbonisation of Singapore’s power sector. With an upgrade to one of the Plant’s turbine units, KMC is estimated to abate up to approximately 50 million kilowatt-hour equivalent of carbon emissions each year. With certain modifications, KMC will also be able to co-fire hydrogen blended with natural gas as feedstock and deliver lower carbon power to the grid in future.

Advising KIT were Allen & Gledhill Partners Tan Wee Meng and Teoh Sze Min.

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