Sembcorp Industries to Acquire 35% Stake in 1.9 GW Renewables Portfolio in China

Singapore-based renewable energy company Sembcorp Industries entered an agreement to acquire a 35% interest in 1,900 MW of operational wind and solar portfolio in China.

Sembcorp Industries, through its wholly-owned subsidiary Sembcorp Energy, signed an equity transfer agreement with China state-owned investment holding company, State Development Investment Corporate Group (SDIC)’s Shanghai SDIC Xieli Development Equity Fund Partnership (Xieli Fund), to acquire a 35% interest in SDIC New Energy for a consideration of approximately RMB 1.5 billion (~$235.2 million).

SDIC New Energy’s portfolio consists of 30 operational wind and solar PV projects with a total gross installed capacity of about 1.9 GW located across seven provincial regions in China. SDIC Power, the public-listed power arm of SDIC, will hold the remaining 65% of SDIC New Energy.

“We are committed to achieving our group target of 10 GW of gross installed renewables capacity by 2025. China is an important part of our brown to green transformation plan. We are pleased to partner with SDIC Power to grow the joint venture together. Along with our recently announced 658 MW acquisition, our Group renewables portfolio is expected to reach a gross capacity of 6.1 GW,” said Wong Kim Yin, Group President & CEO at Sembcorp Industries.

“Sembcorp is keen to build up our renewable portfolio in China, the world’s largest and fastest-growing renewables market. SDIC Power is a top SOE power company in China, with a strong track record and capabilities in the China power and clean energy industry. We believe we have complementing strengths, and we are committed to working alongside SDIC Power to drive further growth in renewables through this joint venture,” Alex Tan, CEO of China, Sembcorp Industries, added.

The consideration for the transaction was determined on a willing-buyer willing-seller basis, considering the operational quality, financials, and cash flow generation of the assets through customary valuation techniques.

Sembcorp’s investment will be funded through a mix of internal cash resources and external borrowings. The transaction is expected to complete in the first half of 2022, subject to customary conditions.

Earlier in November 2021, Sembcorp, through its 100% subsidiary Sembcorp Energy (Shanghai), has acquired a 98% stake in a 658 MW portfolio of operational wind and solar PV assets from GCN Capital Partners Infrastructure Fund III and its affiliates for RMB 3.3 billion (~$517 million).

Sembcorp Industries recently raised S$675 million (~$496.1 million) by launching a sustainability-linked bond in Singapore. The proceeds will be used to finance renewable energy or other sustainable projects.