Sembcorp acquires power assets in China for US$85.5 million

The acquisition includes a 49% stake in four wind power assets and a coal-fired power plant.

In a press release, Sembcorp Industries announced that its wholly-owned subsidiary, Sembcorp Utilities, has signed a sale and purchase agreement with The AES Corporation to acquire part of its power asset portfolio in China for US$85.5 million or equivalent to approximately S$106.7 million.

The acquisition includes a 49% stake in four wind power assets owned through AES Huanghua, AES Hulunbeier Wind Power Co., AES Xinba’erhu Wind Power Co. and AES Chenba’erhu Wind Power Co., as well as a 25% stake in a coal-fired power plant owned through AES China Corp.

Commenting on the transaction, Tang Kin Fei, Group President & CEO of Sembcorp, said, “This acquisition strengthens our global energy portfolio and provides a platform to accelerate Sembcorp’s growth in the renewable energy sector. As a responsible energy player, Sembcorp aims to have a portfolio of high efficiency thermal and renewable power generation assets including a growing component of low carbon capacity. With this acquisition, our renewable energy capabilities will now include wind in addition to biomass.

“We are excited about the growth prospects and immense opportunities that this acquisition will bring to Sembcorp. We now have our first wind power assets in China, an important foothold to tap into the fast-growing and largest wind power market in the world. At the same time, this transaction is set to further extend Sembcorp’s presence in China as an established energy and water player. With the inclusion of Inner Mongolia and Shanxi, we will have utilities operations in 11 provinces across the country.”

The wind power assets comprise three wind power plants in Inner Mongolia and one wind power plant in Hebei with a total gross power capacity of 247.5 megawatts. These wind power plants are currently owned through four 49%-owned Equity Joint Ventures with Chinese partner, Guohua Energy Investment Co. Guohua is one of the top wind power companies in China and is owned by Shenhua Group Corporation, a listed state-owned enterprise and the largest coal company in China as well as the largest coal supplier in the world.

As part of the transaction, Sembcorp will also acquire a 25% stake in a Cooperative Joint Venture, which owns, operates and manages a 2,100-megawatt coal-fired power plant in the province of Shanxi. The Cooperative Joint Venture expires in 2016.