Sembcorp Industries, an energy, water and marine group operating worldwide, through its wholly-owned subsidiary Sembcorp Utilities, has entered into an agreement to acquire the remaining 28 percent stake in Sembcorp Green Infra (SGI), a wind and solar project developer, from IDFC Private Equity Fund III (IDFC)’s for ₹14.1 billion (~$220.2 million). With this acquisition, Sembcorp Industries will become the sole owner of SGI.
This acquisition will be financed through a mix of internal funds and loans. Completion of the deal is expected to take place in the first quarter of 2018.
According to a company release, “Pursuant to the prevailing shareholders’ agreement between the parties, Sembcorp Utilities exercised its contractual right to acquire IDFC’s remaining shares in SGI. The consideration for the acquisition was agreed between the parties based on, comparable market valuations, and an assessment of SGI’s assets and business prospects.”
“Buying IDFC’s stake in SGI reaffirms Sembcorp’s commitment to a long-term presence in India. The deal will allow us to drive SGI’s growth as the 100 percent owner, and increase our investment in a wind and solar generation portfolio that strongly complements our thermal power assets in the country. Strengthening our investment in renewables will also help us stay abreast of advances in greener power generation, and will enable us to deliver electricity to our customers in an increasingly sustainable manner,” said Neil McGregor, Group President & CEO of Sembcorp Industries.
“With the far-reaching energy reforms and electrification underway in India, there is a demand for both renewable and thermal power in the country. Sembcorp’s acquisition of IDFC’s stake in SGI strengthens our position as a reliable provider of clean and low-cost power to support India’s growing energy needs,” said Vipul Tuli, CEO & Country Head of Sembcorp India.
The company stated, “SGI has close to 1,200 megawatts of wind and solar power capacity in operation and under development.” Recently, SGI entered into a power purchase agreement with power trading corporation (PTC) India, to develop 249.9 MW wind power project.
On August 17, 2017, Sembcorp announced that it has increased its stake in Sembcorp Green Infra to approximately 72 percent.
On February 11, 2015, Sembcorp announced the that it has acquired 60 percent stake in Green Infra, from IDFC Private Equity Fund III, which is managed by IDFC Alternatives.
According to Mercom’s India Solar Project Tracker, Sembcorp Green Infra has installed solar portfolio of 35 MW in the states of Gujarat and Rajasthan.
Image credit: Sembcorp
Wendy is a co-founder of Mercom Capital Group, the parent company of Mercom India. Wendy is a contributing editor at MercomIndia.com and is responsible for content quality across the company and products. She has over 15 years of business and finance experience in the energy and technology markets. In addition to Mercom, Wendy has written for many other clean energy-focused blogs and publications. More articles from Wendy Prabhu.