Alternative asset and private equity investor KKR announced an agreement to acquire Australia-based independent power producer (IPP) Zenith Energy.

Founded in 2006, Zenith is one of Australia’s largest IPPs, with a focus on sustainable and reliable hybrid power solutions for remote, off-grid resource sector clients and urban microgrids for commercial, industrial, and residential precincts – including serving Australia’s off-grid mining industry.

The company has more than 710MW contracted capacity across approximately 15 sites, secured under long-term contracts, and recently completed a A$1.9 billion (USD$1.2 billion) refinancing and upsizing of its existing bank debt facilities, providing the company with more than A$1 billion of growth capital to support the development of new projects.

Zenith’s CEO and Managing Director, Hamish Moffat, said:

“The investment by KKR will accelerate our growth and ability to service large scale projects with a broad capital base. There are significant and immediate opportunities inherent in the decarbonisation of Australia’s mining sector, which Zenith is uniquely positioned to deliver via large-scale, high penetration, hybrid power projects. Today’s announcement positions the company to continue providing our distinct value proposition via these unique remote energy solutions to our existing clients, while enabling us to pursue a robust pipeline of new opportunities as Australia’s mining sector intensifies its decarbonisation efforts.”

The acquisition marks the latest in a series of energy transition and sustainable infrastructure-focused transactions for KKR, and follows the identification by the firm in December 2023 of decarbonization, and the large scale “brown-to-green” transition of asset-heavy sectors in particular, as a key “mega-theme” driving investment opportunities.

KKR is acquiring Zenith through its Asia Pacific Infrastructure Investors II Fund from an investor consortium including Pacific Equity Partners, OPSEU Pension Trust, and Foresight Group, with Zenith’s founder and management retaining a minority stake.

Andrew Jennings, Managing Director and Head of Australia & New Zealand (ANZ) Infrastructure, KKR, said:

“Zenith has established itself as one of the clear leaders in deploying and managing hybrid power solutions in Australia, a priority market for KKR in Asia Pacific. We look forward to supporting Zenith and its management team over the next stage of growth and helping them capitalise on the significant opportunity for off-grid renewable power.”