Sembcorp stays on transformation course, but big bet on renewable energy comes with risks

HARDLY a month goes by without Sembcorp Industries announcing a renewable-energy contract or strategic deal, the latest being a 300 megawatt (MW) wind-solar hybrid project in India that it will build, own and operate.

The deals reflect an aggressive multi-year shift into the energy transition space, putting the company on track to becoming one of the purest renewable energy plays on the Singapore Exchange. But the big bet on renewable energy comes with its own risks, including the possibility that demand for renewable energy will not be as high as expected.

Sembcorp first made a strategic decision in 2021 to transform itself, once one of the biggest oil and gas rig builders in the world, into a sustainability solutions group. Two years later, the company reaffirmed its commitment to the transition with a 2024-to-2028 road map that included S$14 billion of capital investment over the period.