SEMBCORP Industries : U96 0%’ wholly owned subsidiary, Sembcorp Power, has signed two long-term power purchase agreements (PPAs) with subsidiaries of Equinix, a US-based data-centre firm that operates as a real estate investment trust (Reit).

On Monday (Apr 29), Sembcorp said the PPAs will be accretive to the group’s earnings in the financial year ending Dec 31, 2024.

Under the agreements, Sembcorp Power will supply Equinix a maximum capacity of 75 megawatt-peak (MWp) from its renewable energy portfolio, and 30 megawatts (MW) from its power generation portfolio, for up to 18 years.

The power supply will be sourced from Sembcorp’s solar assets. The renewable energy PPA in particular will be sourced from the Housing and Development Board’s (HDB) SolarNova 7 programme and supply energy from solar panels installed across 1,290 HDB blocks and 99 government sites, Equinix said in a media statement.

Sembcorp said this represented Equinix’s first renewable energy PPA in Singapore. With this addition, it has executed 22 PPAs globally.

“These agreements are expected to contribute over 3,000,000 megawatt hours of renewable energy annually to local grids across the US, Australia, France, Finland, Portugal, Spain, Sweden and Singapore once operational,” Equinix said.

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The deals are expected to increase Sembcorp’s long-term contracted capacity for its gas-fired power generation portfolio in Singapore to 77 per cent, from 74 per cent currently.

These new Equinix PPAs will also help to ensure a “strong and stable stream of operating cash flow” for Sembcorp, added the group.

In addition to the two PPAs, Sembcorp has also signed long-term PPAs with Micron Semiconductor, Singtel and ST Telemedia, with contracts spanning eight to 18 years.

Shares of Sembcorp closed S$0.08 or 1.5 per cent lower at S$5.36 on Monday.