KfW IPEX-Bank is part of a syndicate of banks financing the purchase of Erdgasversorgungsgesellschaft Thüringen-Sachsen mbH (EVG) and its natural gas pipe network.
KfW IPEX-Bank has joined SEB AG, CIBC, Crédit Agricole CIB, ING Bank and Scotiabank (arranger) to form the financing syndicate. The financing totals €270 million (US$305 million) and has a term of five years.
The network consists of a total of 1168 kilometres of pipes in the German federal states of Thuringia, Saxony, Saxony-Anhalt and Hesse. The purchaser is the European infrastructure fund 'European Diversified Infrastructure Fund' (EDIF) run by First State Investments, the asset manager of the Commonwealth Bank of Australia.
The sellers are the energy providers E.ON SE and Verbundnetz Gas Aktiengesellschaft (VNG) in Leipzig.
The sale is part of E.ON and VNG’s ongoing strategy of optimizing their business portfolios.
In 2013 EDIF acquired E.ON’s Nuremberg-based regional gas grid Ferngas Nordbayern GmbH. First State also led a consortium which acquired the local power distribution grid of Finnish utility Fortum for €2.55 billion.
EDIF is a 15-year, closed-ended fund. The fund’s investment focus is on mature, income-generating infrastructure assets in the utilities, transportation and essential services sectors which can offer attractive risk-adjusted returns.
Since 2009 First State Investments has deployed or reserved 70% of the fund's total commitments, €2 billion, in eight infrastructure companies. The firm has diversified across the water, gas, electricity, broadcasting towers and transportation sectors in the UK, Finland, Germany, Sweden, Denmark and Spain.