Sembcorp to acquire 658MW of wind, solar assets in China for 3.3b yuan

SEMBCORP Industries U96 will acquire 98 per cent interest in a portfolio of operational wind and solar photovoltaic (PV) 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 energy demand centres Hebei, Henan and Shandong provinces and have a total gross installed capacity of 658 megawatts (MW).

The portfolio will provide Sembcorp with a scalable renewable platform to drive further growth in China, Sembcorp said in a press statement on Friday (Nov 12).

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

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

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 2022, 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, 2021.

Shares of Sembcorp closed flat on Friday (Nov 12) at S$2.05.

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