SINGAPORE; UNITED STATES OF AMERICA —Singapore-based holding company Kenon Holdings Ltd. has agreed to deploy up to $450 million in cash to acquire a 25% indirect stake in Vicinity District Energy, a prominent US provider of district heating and cooling infrastructure. The acquisition forms part of a joint buyout with Harrison Street Asset Management from an affiliate of Antin Infrastructure Partners, valuing Vicinity at a total enterprise value of $2.92 billion. To support the acquisition and fund future capital growth, a lender consortium has provided up to $1.4 billion in non-recourse debt financing. Expected to close in the second quarter of 2027 subject to regulatory approvals, the transaction represents Kenon's first major strategic expansion outside of its core power generation subsidiary, OPC Energy Ltd.
Vicinity operates essential thermal utility networks across 12 major US metropolitan areas, including Boston and Philadelphia, servicing more than 700 commercial, healthcare, and higher education institutional clients across 250 million square feet of space. By delivering steam, chilled water, and hot water through 140 miles of subterranean piping, district energy utilities create steady cash flows governed by long-term contracts with inflation adjustments and cost pass-through mechanisms. Kenon Holdings Ltd. is a global holding firm listed on the NYSE and TASE that focuses on dynamic portfolio investments across energy and infrastructure sectors. In 2025, Vicinity generated $611 million in revenue and expects an annualized run-rate Adjusted EBITDA exceeding $140 million.
This transaction highlights growing institutional appetite for core energy infrastructure offering predictable earnings alongside decarbonization upside. Vicinity is actively deploying eSteam, an electrified thermal energy solution aimed at helping municipal and corporate customers achieve net-zero building targets. For urban commercial real estate operators, higher education institutions, and healthcare centers, district energy systems offer an operational alternative to capital-intensive on-site HVAC systems while accelerating municipal carbon reduction compliance across major American cities.
For infrastructure investors and utilities, the deal underscores the strategic value of long-tenor utility assets backed by debt structures that minimize direct balance-sheet liability. By utilizing cash reserves to take a minority equity position with significant board representation alongside an established institutional partner managing over $110 billion in assets, Kenon gains entry into stable US municipal infrastructure. The platform provides immediate exposure to regulated energy delivery while retaining capital flexibility to expand network density and support long-term urban electrification initiatives.
