Kenon Acquires 25% Stake in District Heating Firm

SINGAPORE, Sept. 30, 2026 /CourierPR/ -- Kenon Holdings Ltd., a diversified energy company, has announced a significant acquisition that will see it acquire 25% of Vicinity District Energy’s equity interest for approximately $450 million in cash. The acquisition is part of a larger transaction in which Vicinity will be sold to an entity owned by Kenon and funds managed by Harrison Street Asset Management (HSAM). The transaction is expected to be funded by a debt facility of up to $1.4 billion, which is non-recourse to Kenon and HSAM.

Vicinity District Energy is a leading provider of district heating and cooling services in the United States, serving more than 700 customers across approximately 1,000 buildings, representing over 250 million square feet of space. The company operates a network of over 140 miles of underground pipe infrastructure, delivering steam, hot water, and chilled water to commercial, institutional, healthcare, higher education, residential, and other customers. Vicinity has a long history, with some of its systems operating for over 150 years, and it is a pure-play district heating and cooling infrastructure utility platform.

The acquisition of Vicinity District Energy aligns with Kenon’s strategy of diversifying into an area distinct from its core electricity generation activities, which are managed by OPC Energy Ltd. and its subsidiaries. The transaction is expected to be completed in the second quarter of 2027, subject to regulatory approvals and clearances.

Vicinity District Energy’s revenues are largely derived from long-term contracts with inflation-linked escalators and fuel cost pass-throughs. The company has also been an early mover in offering an affordable decarbonized solution, eSteamTM, to support customers’ sustainability objectives. Vicinity has a strong track record of growth, supported by a growing customer base and a pipeline of growth opportunities across network densification, network extensions, and asset optimization, expected to be funded from operating cash flows and the capital expenditure debt facility.

The acquisition is expected to provide Kenon with a significant stake in a leading district heating and cooling utility platform, which is expected to generate an annualized run rate Adjusted EBITDA of over $140 million. The total enterprise value for 100% of Vicinity District Energy is estimated at $2.92 billion, subject to post-closing adjustments including for closing date cash, working capital, and debt.

Kenon’s partner in the acquisition, HSAM, is a global alternative investment management firm with over $110 billion in assets under management. The acquisition is expected to be funded by cash on hand and available liquidity, with no obligation to acquire in excess of a 25% indirect interest in Vicinity. Kenon has agreed to provide a Guarantee of up to $40.2 million, which is limited under the LLC Agreement.

Completion of the acquisition is subject to certain customary closing conditions, including receipt of regulatory approvals and clearances or the expiration or termination of applicable waiting periods. The transaction is expected to be completed in the second quarter of 2027, subject to the terms and conditions of the Equity Purchase Agreement and the LLC Agreement.

The acquisition of Vicinity District Energy is expected to be a significant step in Kenon’s strategy of diversifying into a distinct area of the energy sector and aligning with a leading utility platform. The acquisition is expected to provide Kenon with a significant stake in a growing and profitable business, with a strong track record of growth and a pipeline of opportunities for future expansion.