Sembcorp to acquire wind, solar assets in China

Sembcorp Industries will acquire 98 per cent interest in a portfolio of operational wind and solar photovoltaic assets in China for 3.3 billion yuan (S$700 million).

Its wholly owned subsidiary Sembcorp Energy (Shanghai) Holding has signed a sale and purchase agreement to acquire the assets from CGN Capital Partners Infrastructure Fund III - a private equity infrastructure fund focused on renewable energy infrastructure assets in China - and its affiliates.

The assets are located in the energy demand centres of Hebei, Henan and Shandong provinces, and have a total gross installed capacity of 658MW.

The portfolio will provide Sembcorp with a scalable renewable platform to drive further growth in China, the firm said in a press statement yesterday.

The company noted that the assets are contracted and eligible for fixed feed-in tariffs under China's renewable energy policy.

Sembcorp chief executive of China Alex Tan said the mainland, being the world's largest renewables market, is a priority growth market for the group.

Noting that Sembcorp's renewables portfolio of wind and solar assets in China will double in gross capacity to 1,400MW from 725MW post-acquisition, he said: "This scalable platform will boost our growth in China and support the building of our operational and technical capabilities."

The acquisition will be funded through a mix of internal cash resources and external borrowings, and is expected to be completed in the first half of next year, subject to conditions precedent, including regulatory approvals.

The deal is not expected to have a material impact on Sembcorp's earnings per share and net asset value for its financial year ending Dec 31 this year.

Shares of Sembcorp traded up one cent, or 0.5 per cent, at $2.06 at 9.40am yesterday, after the announcement, before ending the day at $2.05.

THE BUSINESS TIMES