Sembcorp announces $345 million Vector Green deal


Singapore’s Sembcorp Industries Ltd on Sunday announced that its subsidiary Sembcorp Green Infra Ltd (SGIL) has inked an agreement with US private equity firm Global Infrastructure Partners’ India Infrastructure Fund II to buy 100% stake in Vector Green Energy Private Ltd at an equity value of S$474 million ($345 million).

Mint reported on 10 November about the finalized deal, and on 13 August about Sembcorp and Torrent Power Ltd in the race to buy Vector Green Energy. Standard Chartered ran the sale process. The transaction once over will add 583 megawatt (MW) of renewable assets to Sembcorp’s portfolio in India. Singapore Exchange listed Sembcorp through SGIL has a 1.051-gigawatt (GW) wind energy capacity in India.

“Completion of acquisition will bring the Group’ s gross renewable energy capacity to 8.5GW, closer to its 2025 target of 10GW of gross installed renewable capacity,” Sembcorp said in a statement on Sunday and added, “Sembcorp’s gross renewable energy portfolio installed and under development in India will grow to 3GW.”

In September, the Singaporean company announced plans to sell Sembcorp Energy India Ltd (SEIL), which operates two supercritical coal-fuelled power projects totalling 2.6GW, to Tanweer Infrastructure Pte Ltd for 11,700 crore. Sembcorp has an energy portfolio of 16.7GW, of which 7.1 GW is renewable energy from wind, solar and energy storage projects.

“The acquisition will be funded through internal cash resources and external borrowings. Completion of the acquisition is subject to customary closing conditions and is expected by the first quarter of 2023. The acquisition is expected to be accretive to earnings upon completion,” the statement said and added, “Including Vector Green, Sembcorp’s gross renewables portfolio installed and under development in India will total 3GW, comprising 1GW of solar assets and 2GW of wind assets.”

Sembcorp, which has invested $4 billion in India, plans to focus on green energy investments in India amid the country undertaking the world’s largest clean energy transition.

“Sembcorp remains committed to growing its renewables portfolio in India, one of the fastest growing renewables markets in the world,” Sembcorp Industries group president and chief executive officer Wong Kim Yin said in the statement.

Investors have been attracted by India’s climate action plan, with the country having an installed renewable energy capacity of 163GW and green energy projects registering a foreign direct investment of around $78 billion.

“This acquisition brings significant utility-scale solar capacity to our India business, which will complement our existing wind portfolio. It also broadens and deepens our renewable energy capabilities and presence across states in India, and positions us well for further green growth in the country,” added Sembcorp Industries CEO of South Asia Vipul Tuli in the statement.

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