SINGAPORE - Sembcorp Industries announced on Wednesday that its unit, Sembcorp Utilities, has signed agreements to acquire a 60 per cent stake in a renewable energy company in India.

The company, Green Infra, has a wind and solar portfolio.

Mainboard-listed Sembcorp said that the move into India's attractive renewable energy market is a major step in its strategy to grow the renewable energy business.

Sembcorp will invest in a 60 per cent stake in Green Infra for Rs 10.6 billion (about S$227 million), held through Sembcorp Renewables, a unit of Sembcorp Utilities.

IDFC Private Equity Fund III, which is managed by IDFC Alternatives, will continue to hold the remaining 40 per cent stake in Green Infra.

IDFC Alternatives is a unit of IDFC, which is listed on the Mumbai Stock Exchange and 16.4 per cent of it is owned by the government of India.

Sembcorp chief executive Tang Kin Fei, said: "This acquisition will provide Sembcorp with a platform to grow our renewable energy business.

Now that Sembcorp has investments in both thermal and renewable energy, it said that it "is well-positioned for growth in the energy sector with a balanced portfolio of energy assets".

Green Infra's portfolio will almost triple Sembcorp's current renewable energy generation capacity globally to more than 1,000 megawatts, and give Sembcorp solar power capabilities too.

The major part of Green Infra's electricity output is sold under long-term power purchase agreements with India's state electricity boards, while the remaining output is sold under long-term contracts with commercial customers.

The Rs 10.6 billion acquisition cost will be funded through a mixture of internally generated funds and debt financing, said Sembcorp.

The transaction is expected to be completed by the end of February.