Sembcorp to Acquire 795 MW Solar Projects in China for $165 Million

Sembcorp's global renewables portfolio will reach 7.9 GW after the acquisition

November 15, 2022


Singapore-based renewable energy company Sembcorp Industries will acquire three solar projects with a combined capacity of 795 MW in China for RMB 1.16 billion ($165 million).

The acquisition value includes an initial consideration of approximately RMB15 million (~$2.12 million) and a future capital injection of up to RMB1.14 billion (~$163.01 million).

Sembcorp’s 49%-owned joint venture – Beijing Energy Sembcorp (Hainan) International Renewables – will buy the assets from BEI Energy Development Company (Beijing).

The solar assets are in the south of Hebei Province and are contracted to the State Grid Corporation of China.

Beijing Energy International Investment, a wholly-owned subsidiary of Hong Kong-listed Beijing Energy International, holds the remaining 51% equity in the joint venture with Sembcorp Industries.

China is one of Sembcorp’s key markets driving its brown-to-green transformation. In November last year, Sembcorp Industries, through its 100% subsidiary Sembcorp Energy (Shanghai), acquired a 98% stake in a 658 MW portfolio of operational wind and solar photovoltaic assets from GCN Capital Partners Infrastructure Fund III and its affiliates for RMB 3.3 billion (~$517 million).

“With the completion of this acquisition, Sembcorp’s global renewables portfolio will reach 7.9GW, close to its 2025 target of 10GW of gross installed renewables capacity,” Sembcorp Industries said.

Sembcorp’s investment will be funded through internal cash resources and external borrowings. Completion of the acquisition is planned for the first quarter of 2023 and is expected to be accretive to earnings upon completion.

The company’s wholly-owned subsidiary Sembcorp Green Infra recently entered into an agreement with India Infrastructure Fund II, managed by Global Infrastructure Partners, to acquire 100% of Vector Green in a ₹27.8 billion ($474 million) deal.

Sembcorp announced a turnover of S$222 million (S$161 million) in 1H of 2022 from the renewables segment, an increase of 52% from the S$146 billion (~$6.30 million) recorded in the same period last year. Net profit for the renewables segment increased to S$76 million (~$55 million) from S$24 million (~$17 million), an increase of 217%.

According to Mercom’s 9M and Q3 2022 Solar Funding and M&A Report, in 9M 2022, there were 207 project acquisitions with a combined capacity of 52 GW compared to 200 projects amounting to 55.5 GW in 9M 2021.