ST Engineering, Temasek JV targets $800m portfolio in five years

The joint venture was formed to capture freighter aircraft demand.

Singapore Technologies Engineering Ltd (ST Engineering) and Temasek has entered into a 50-50 joint venture with a plan to build a portfolio worth $800m (US$600m) within five years.

The joint venture was formed for freighter aircraft leasing, in response to the demand arising from higher e-commerce and cargo volumes. It will be investing in passenger aircraft that will be converted into freighters.

ST Engineering, for its part, will provide the associated maintenance, repair and overhaul services to the aircraft. It will also serve as the JV’s asset and lease manager.

“In the medium to long-term, the JV intends to securitise the leasing income streams by way of a business trust to unlock capital,” ST Engineering President and Head of Commercial Aerospace Jeffrey Lam said.

This is also in line with the JV’s focus to implement environmental, social and governance (ESG) policy to guide its operations.

“As an investor and shareholder, we are focused on embedding sustainability in our investment approach,” Uwe Krueger, Head, Industrials, Business Services, Energy & Resources, Temasek said.

“The joint venture with ST Engineering represents an opportunity for both of us to identify solutions for the reduction of carbon emissions, even in a traditionally carbon-intensive industry, by putting capital to work in those solutions.”