Sembcorp Acquires 98% Stake in a 658 MW Wind, Solar Portfolio in China for $517 Million

The company’s renewables portfolio in China will double to 1,400 MW


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

Located in energy demand centers Hebei, Henan, and Shandong provinces, the assets are contracted and are eligible for fixed feed-in tariffs under the China renewable energy policy.

“The acquisition of this renewables growth platform in China is an important step towards our target to have 10 GW of gross installed renewables capacity by 2025. We are focused on the execution of our growth strategy across our markets to achieve our brown to green transformation,” said Wong Kim Yin, Group President, and CEO, Sembcorp Industries.

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 via customary valuation techniques.

The final consideration would be adjusted based on the audited financials after the transaction. Sembcorp’s investment will be funded through a mix of internal cash resources and external borrowings. Completion of the acquisition is expected in the first half of 2022.

“China is the world’s largest renewables market and a priority growth market for Sembcorp. With this acquisition, our renewables portfolio in China will double in gross capacity from 725 MW to 1,400 MW of wind and solar assets. This scalable platform will boost our growth in China and support the building of our operational and technical capabilities,” said Alex Tan, CEO China, Sembcorp Industries.

Sembcorp has invested in the China market for over 20 years. It has a total operational capacity of 725 MW of wind power projects across Hebei and Inner Mongolia.

Sembcorp has an energy portfolio of over 13 GW, with more than 3.5 GW of renewable energy capacity comprising solar, wind, and energy storage globally.

Sembcorp Industries had 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.

In June 2021, Sembcorp Industries announced the successful pricing of its inaugural S$400 million (~$301.9 million) green bond offering to support its growing renewables portfolio.