Singapore’s Sembcorp Industries has made its maiden foray into India’s renewable energy sector after agreeing to acquire 60% stake in wind and solar project developer Green Infra for Rs 10.6 billion (US$167 million).
Sembcrop’s wholly-owned subsidiary, Sembcorp Utilities, signed shareholders and share purchase agreements with IDFC Private Equity Fund II and IDFC Private Equity Fund III, to buy the stake in Green Infra. 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% 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% owned by the government of India. The 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.
Green Infra has 516 megawatts if operating capacity, with 665MW of wind and 35MW of solar projects in operation and under development, located in six states. Its portfolio will almost triple Sembcorp’s current renewable energy generation capacity globally to over 1,000 megawatts.
The acquisition will also provide Sembcorp with its first solar assets in its portfolio, broadening it beyond the current wind, biomass and waste-to-energy assets it owns. Green Infra’s electricity output is sold under long-term power purchase agreements with India’s state electricity boards, while the remaining output is sold under long-term contracts with commercial customers.