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November 8, 2021

KKR invests in South Korean energy firm SK E&S

The investment of $2bn is made from KKR’s Asia Pacific Infrastructure Fund.

By Archana Rani

Investment giant KKR has acquired newly issued redeemable convertible preferred shares worth KRW2.4tn ($2bn) of South Korean energy company SK E&S.

The investment is made from KKR’s Asia Pacific Infrastructure Fund to provide it with the opportunity to receive cash or in-kind redemption as an option for future repayment.

There is also the possibility of converting into SK E&S common shares, the investment firm said.

SK E&S operates businesses that include upstream such as overseas gas field development and downstream such as power generation, district energy, and city gas distribution.

It distributes natural gas to customers in cities and rural areas across eight regions in the country.

In September this year, SK E&S unveiled plans to increase its annual hydrogen supply capacity to 280,000t by 2025.

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This includes 30,000t of liquefied hydrogen and 250,000t of blue hydrogen.

SK E&S also announced plans to have 7GW of installed renewable capacity by 2025 in a bid to become a major global player in the sector. It is also pursuing projects in markets such as Vietnam and India.

KKR Infrastructure team member Keith Kim said: “KKR is excited by this unique opportunity to join SK E&S in its journey to accelerate its growth and transformation into a global clean energy solution provider.

“Sustainability continues to be at the top of its minds at KKR when reviewing and executing investments, which is why KKR is excited to invest together with leading businesses such as SK E&S that seek to provide sustainable energy solutions.”

SK E&S is planning to use the latest funding to accelerate its growth strategy.

KKR Asia Pacific Infrastructure Head David Luboff said: “We look to continue investing in compelling infrastructure opportunities where we can leverage KKR’s global experience and networks to partner with Korean businesses to achieve their transformations.”

In July 2021, Independence Energy, which is managed by KKR’s energy real assets team, and Contango Oil & Gas Company agreed to merge in a deal to create a new oil and gas company with an enterprise value of $5.7bn.

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