Sembcorp signs 12-year agreement to supply power to Indian state Andhra Pradesh

SEMBCORP Energy India, a wholly-owned subsidiary of Sembcorp Industries (Sembcorp) U96 : U96 0%, has signed a long-term power purchase agreement (PPA) to supply 625 megawatts of power to power distribution companies in Andhra Pradesh in India.

The 12-year agreement is expected to commence in 2023, said mainboard-listed Sembcorp in a bourse filing on Wednesday (Jan 5).

The power supply will be generated from Sembcorp Energy's 2.6 gigawatt supercritical power generation facility in Nellore, India.

With the agreement, 77 per cent of Sembcorp Energy's thermal plant capacity would be underpinned by long and mid-term PPAs, said Sembcorp.

It added that the agreement is not expected to have a material impact on the company's earnings per share and net asset value per share for the financial year ending Dec 31, 2022.

Vipul Tuli, chief executive of Sembcorp Industries' South Asia arm, said: "At a time when Sembcorp is actively increasing its presence in renewable power, this long-term PPA will ensure optimal utilisation of our conventional generation capacity.

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"We are pleased to continue our partnership with Andhra Pradesh on its journey of growth and development."

The counter closed S$0.05 or 2.5 per cent higher at S$2.06 on Tuesday before the announcement.