Singapore-based Sembcorp Industries, through its wholly-owned subsidiary Sembcorp Energy Shanghai Holding, is to acquire a 98% interest in a portfolio of operational wind and solar farms in China totalling 658MW from CGN Capital Partners Infrastructure Fund 3 and its affiliates.
The deal is worth approximately RMB 3.3bn (€452m), net of external debt financing.
The portfolio will provide Sembcorp with a scalable renewable platform to drive further growth in China, the company said.
The projects are located in energy demand centres Hebei, Henan and Shandong provinces, and are contracted and are eligible for fixed feed-in tariffs under the China renewable energy policy.
Sembcorp Industries chief executive Wong Kim Yin said: “The acquisition of this renewables growth platform in China is an important step towards our target to have 10GW of gross installed renewables capacity by 2025.
“We are focused on the execution of our growth strategy across our markets to achieve our brown to green transformation.”
Sembcorp Industries China chief executive Alex Tan said: “China is the world’s largest renewables market, and a priority growth market for Sembcorp.
“With this acquisition, our renewables portfolio in China will double in gross capacity from 725MW to 1400MW of wind and solar assets. This scalable platform will boost our growth in China and support the building of our operational and technical capabilities.”
Sembcorp said the final consideration would be adjusted based on the audited financials at completion of the transaction.
The investment will be funded through a mix of internal cash resources and external borrowings.
Completion of the acquisition is expected in the first half of 2022, and is subject to conditions precedent including regulatory approvals