The steam plant that heats and cools much of downtown Boston has a new set of owners lined up. Kenon Holdings and funds managed by Harrison Street Asset Management have agreed to acquire a majority interest in Vicinity Energy, the district-energy company headquartered on Kneeland Street, in a deal that values the business at an enterprise value of $2.92 billion.
Kenon's piece of the transaction covers a 25% equity interest in Vicinity District Energy for approximately $450 million in cash, according to a Kenon announcement. Harrison Street is making its move through a joint venture with Kenon, with the buyer jointly owned by Kenon and funds managed by Harrison Street. Depending on how the deal shakes out, that buyer is expected to end up holding somewhere between roughly 60% and 100% of Vicinity's holding company, leaving room for the seller to retain a stake.
As The Boston Globe reports, the seller is Antin Infrastructure Partners, a French private equity firm that bought Vicinity from Veolia in 2020 after Antin had acquired the company for $1.25 billion in 2019. The new valuation puts Vicinity's price tag at nearly triple what Antin paid just seven years ago, and the Globe's reporting indicates Antin will maintain a minority interest in the company going forward.
Who Vicinity Energy Serves Across a Dozen Cities
Vicinity describes itself as the largest provider of steam energy to U.S. cities, and per the same Kenon filing, it operates as the sole district heating and cooling provider in 12 major American cities, including Boston and Philadelphia. The company serves more than 700 customers across roughly 1,000 buildings — about 250 million square feet of space — delivered through more than 140 miles of underground pipe infrastructure, and it sells chilled and hot water in addition to steam.
Those long-term customer relationships come with staying power: Vicinity's contracts carry a weighted-average tenor of approximately 15 years, with inflation-linked escalators and fuel-cost pass-throughs built in, the prnewswire.com release notes. The company reported approximately $611 million in total U.S. GAAP revenue in 2025. Locally, Vicinity employs about 550 people companywide, with 210 of those jobs based in Boston, according to the Globe.
Financing the Deal and the Road to Closing
A consortium of lenders has committed up to $1.4 billion in non-recourse debt financing to help fund part of the purchase price along with a facility for future growth capital expenditures, per the prnewswire.com announcement. The Globe reports the deal still requires various regulatory approvals and is expected to close in the first half of 2027.
Kevin Hagerty, Vicinity's president and CEO, is quoted in a Harrison Street announcement confirming his role atop the company. According to the Globe's reporting, Hagerty said his leadership team is excited to work with Harrison Street and that Antin's decision to keep a minority stake shows the firm still believes in Vicinity's future. Harrison Street itself is a Chicago-based real estate investment firm that is owned by Colliers International, the real estate giant, the Globe notes.
Betting on Steam Without the Fossil Fuels
The ownership change arrives as Vicinity pushes further into decarbonizing its network. The company has rolled out eSteam, a decarbonized solution generated by electricity instead of fossil fuels, and it buys renewable energy credits to cover that electricity, according to the Globe's reporting. eSteam already accounts for roughly 5% of Vicinity's steam sales volume in Boston and Cambridge and is continuing to grow, with plans to expand the offering to Grand Rapids, Michigan.
At its Kendall facility in Cambridge, Vicinity installed its first electric boiler on March 30, 2025, and per the Globe, the company is now installing a seven-story heat pump that will harness thermal energy from the nearby Charles River, replacing a long-retired coal boiler. Separately, Vicinity's own account of the Kendall transformation describes installing an industrial-scale electric boiler, a river-based heat-pump complex and thermal storage, with the 35-megawatt heat pump complex anticipated to enter service in 2028. Vicinity Energy has said it plans to install similar electrification technologies across its district-energy systems in all 12 U.S. cities it serves, according to a statement from equipment supplier Everllence, which notes the planned heat pump will run primarily on renewable electricity and will be capable of producing around 50 metric tons of steam per hour.
Hagerty has said Vicinity's decarbonization plans extend all the way out to 2050, per the Globe's reporting on the sale. For a network built on century-old steam tunnels beneath downtown Boston, the new ownership group now inherits both that legacy infrastructure and the multi-decade push to electrify it.
