Sembcorp enters utility-scale solar development in Indonesia through JV with local unit

SEMBCORP Industries : U96 0% marked its entry into utility-scale solar development in Indonesia through a joint venture (JV) with a unit linked to PLN, an Indonesian government-owned utilities corporation. 

The deal involves building and developing a large-scale integrated project with 50 megawatts of solar capabilities and 14 megawatt-hour of battery energy storage in Nusantara, the future capital city of Indonesia.

In a bourse filing on Friday (Mar 8), Sembcorp said the JV will, in turn, supply power to state-owned utility provider PLN (Persero), which has committed to a 25-year power purchase agreement to offtake the electricity generated by the project.

The initiative will generate up to 93 gigawatt-hour of clean energy to Nusantara and the wider East Kalimantan province a year, which is equivalent to avoiding over 100,000 tonnes of carbon emissions a year, or taking some 20,000 cars off the roads, the company added.

The signing of the power purchase agreement is not expected to have a material impact on the earnings per share and net tangible asset per share of Sembcorp for the financial year ending Dec 31, 2024, it disclosed.

The deal follows a joint development study agreement that Sembcorp signed with PLN (Persero) in October 2023 on the export of green hydrogen from Indonesia to Singapore.

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On Friday, Sembcorp reiterated that it identifies Indonesia as possessing “large renewable energy potential”.

The JV behind the current project is 49 per cent held by its wholly owned subsidiary, Sembcorp Renewables Indonesia, and 51 per cent held by PLN Nusantara Renewables, a 99-per-cent-owned subsidiary of PLN Nusantara Power.

With the project, as well as a 245-megawatt acquisition that’s still pending completion, Sembcorp will come to have a gross renewables capacity of 13.9 gigawatts globally, it added.

Shares of Sembcorp closed 0.2 per cent higher at S$5.07 on Friday, before the announcement.