Sembcorp to Acquire Renewables Assets in China Through Joint Venture with State Power Investment Corporation Affiliate
November 17, 2022
- Acquisition of portfolio with 830MW of installed renewables capacity and 62MW under development will bring Group gross renewables capacity to 9.4GW1
Sembcorp Industries (Sembcorp) announces that it has, through its wholly-owned subsidiary Sembcorp Energy (Shanghai) Holding Co., Ltd. signed definitive agreements with Wuling Power Co., Ltd. (Wuling Power), an affiliated company of State Power Investment Corporation Limited (SPIC), to acquire a 45.3% interest in Hunan Xingling New Energy Co., Ltd. (Xingling New Energy) for a total equity consideration of approximately RMB1,058 million (approximately S$204 million2). Wuling Power holds the remaining 54.7% interest in Xingling New Energy. Xingling New Energy will own a portfolio of wind and solar assets comprising 830MW of installed renewable capacity and 62MW under development in the provinces of Hunan and Guizhou.
Upon completion of this transaction, Sembcorp will reach a new milestone of 9.4GW1 of gross renewables capacity globally. Sembcorp remains committed and focused on achieving its 2025 targets, which includes reaching 10GW of gross installed renewables capacity by 2025.
Wong Kim Yin, Group President & CEO, Sembcorp Industries, said: “SPIC is the largest renewables player in the world with over 80GW of installed capacity3. Sembcorp is privileged to partner them. We look forward to expanding on this deal to broaden the strategic partnership with SPIC, especially in renewables and green energy.”
Alex Tan, CEO of China, Sembcorp Industries added: “Xingling New Energy is SPIC’s first renewable energy joint venture with a foreign strategic investor. This partnership will allow Sembcorp to establish a presence in Hunan province, a new market for us. Hunan is one of the key energy demand centres in China, and we look forward to working closely with Wuling Power to support China’s renewable energy needs.”
The consideration for this transaction was determined on a willing-buyer willing-seller basis, considering the operational quality, financials and cashflow generation of the assets via customary valuation techniques. Sembcorp’s investment will be funded through a mix of internal cash resources and external borrowings. Completion of the transaction is expected in the first half of 2023, subject to customary conditions precedent including regulatory approvals. The acquisition is expected to be accretive to earnings upon completion.
The acquisition is in the ordinary course of business of Sembcorp Industries and has no impact on the earnings per share and net asset value per share of Sembcorp Industries for the financial year ending December 31, 2022.
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1 Includes the proposed acquisition of 795MW of solar assets in China announced on November 11, 2022, and the proposed acquisition of Vector Green with 583MW of renewables assets in India announced on November 13, 2022
2 Based on exchange rate of RMB1 to S$0.1931 as of November 16, 2022
3 SPIC website, News and Information: http://www.spic.com.cn/mtbd/202206/t20220630_319430.html