Sembcorp unit to acquire Indian renewable energy producer for 27.8b rupees

SEMBCORP Industries has agreed to fully acquire Vector Green Energy, an independent power producer with renewable power generation assets spread across 13 Indian states, for 27.8 billion (S$474 million).

Sembcorp’s wholly owned subsidiary Sembcorp Green Infra signed an agreement with India Infrastructure Fund II, a fund managed by Global Infrastructure Partners India.

With the acquisition, Sembcorp’s gross renewable energy capacity will increase to 8.5 GW, including the proposed acquisition of 795 MW of solar assets in China that was announced on Nov 11. The company has a 2025 target of 10 GW of gross installed renewable capacity.

Vector Green’s portfolio includes 495 MW of solar capacity and 24 MW of wind capacity in operation, with 64 MW of solar projects under development. Following the acquisition, Sembcorp’s gross renewable energy portfolio installed and under development in India will grow to 3 GW, comprising 1 GW of solar assets and 2 GW of wind assets.

The acquisition, expected by the first quarter of 2023, will be funded through internal cash resources and external borrowings. It is expected to be accretive to earnings.

Shares of Sembcorp closed at S$3.04 on Friday (Nov 11), up S$0.02 or 0.66 per cent.