Keppel Infrastructure Fund (KIT) and the Philippine’s Metro Pacific Investments Corporation (MPIC) have agreed to acquire the Philippine’s largest petroleum storage facility for US$267m (€220m).

The vendor of the assets, held in the Philippine Tank Storage International, is the Philippine Investment Alliance for Infrastructure (PINAI) 1, a fund backed by Macquarie Infrastructure Holdings Philippines.

Singapore-based KIT said that upon completion of the transaction, it would indirectly hold 80% of the Philippine company, with MPIC, the Philippine’s largest infrastructure investor, owning the remaining 20%.

The petroleum products import storage facility comprises three tank farms and one marine terminal area, and is located in the Subic Bay Freeport Zone.

Matthew Pollard, CEO of Keppel Infrastructure Fund Management, said the “strategic” acquisition of the storage facility would allow KIT to “diversify, grow and strengthen the resilience of KIT’s distributable cash flow”.

Pollard said the investment presented KIT with an opportunity to capture the expected growth in demand for petroleum products in that country.

When its expansion plan is completed early next year, the facility will have a storage capacity of approximately 6m barrels or approximately 36% of the Philippine’s total import terminal storage capacity.

The proposed acquisition is expected to be completed by January 2021 and KIT is expected to fund the deal with existing cash and debt.

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