What can we expect from Sembcorp Industries’ renewables acquisition?

The firm will see long-term growth and stability in its portfolio.

Sembcorp Industries recently announced two acquisitions of renewable energy from China and India, possibly giving long-term growth and stability in its portfolio, UOBKayHian said in its report.

With regards to  its China acquisition, Sembcorp Industries is acquiring three solar projects with Beijing Energy International, wholly-owned by China’s State-owned Assets Supervision and Administration Commission (SASAC) of the State Council.

“With this strong partner, SCI appears well placed to continue its long-term growth in China,” said UOBKayHian.

In addition, the project’s proximity to Beijing “means that no coal power plants can be set up due to pollution concerns and thus curtailment risk is very low.”

It is also diversifying its renewables portfolio in India, with the acquisition of 100% equity interest in Vector Green Energy, which owns a portfolio of solar and wind assets.

“The acquisition will be funded through internal cash resources and external borrowings with expected completion in the first quarter of 2023.