Sembcorp Utilities to acquire 60% stake in Green Infra

Sembcorp Industries has said that its wholly-owned subsidiary, Sembcorp Utilities, has signed agreements to acquire a 60 per cent stake in Green Infra, a renewable energy company in India with a wind and solar portfolio.

This acquisition marks Sembcorp's entry into India's attractive renewable energy market, and is a major step in the company's strategy to grow its renewable energy business.

Sembcorp signed a shareholder agreement and a share purchase agreement with IDFC Private Equity Fund II and IDFC Private Equity Fund III, to invest in a 60 per cent stake in Green Infra for Rs 10.6 billion (approximately S$227 million). The investment will be held through Sembcorp Renewables, a wholly-owned subsidiary of Sembcorp Utilities.

IDFC Private Equity Fund III, which is managed by IDFC Alternatives, will continue to hold the remaining 40 per cent stake in Green Infra. IDFC Alternatives is indirectly wholly-owned by IDFC Limited, which is listed on the Mumbai Stock Exchange and is 16.4 per cent owned by the government of India.

Tang Kin Fei, Sembcorp Group President & CEO, said, "This acquisition will provide Sembcorp with a platform to grow our renewable energy business. Green Infra's strong capabilities and experienced team will help to accelerate our growth in the renewable energy sector not only in India, but globally. Meanwhile, with investments in both thermal and renewable energy, Sembcorp is well-positioned for growth in the energy sector with a balanced portfolio of energy assets."

Renewable energy player Green Infra adds to Sembcorp a sizable 516-megawatt operating asset portfolio. It also holds assets under development that will bring its total installed power capacity to 700 megawatts by 2015. Comprising 665 megawatts of wind and 35 megawatts of solar assets in operation and under development, and located in six renewable resource-rich states in the southern, western and central regions of India, Green Infra's portfolio will almost triple Sembcorp's current renewable energy generation capacity globally to over 1,000 megawatts.

The acquisition will also provide Sembcorp with solar power capabilities, and broadens the technology footprint of Sembcorp's current renewable energy portfolio beyond wind, biomass and energy-from-waste.

The Rs 10.6 billion (approximately S$227 million) acquisition cost will be funded through a mixture of internally generated funds and debt financing. Completion of the transaction is expected by the end of the month.

The acquisition is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp Industries for the financial year ending December 31, 2015.