Sembcorp Industries will acquire Vector Green Energy for Rs 2,780 crore to expand its renewable energy footprint in India to 3 gigawatts (GW), the company said on Sunday.
The completion of the acquisition will bring the Singapore-based group's gross renewable energy capacity to 8.5 GW, closer to its 2025 target of 10 GW of gross installed renewable capacity.
"Sembcorp Industries (Sembcorp) announces that its wholly-owned subsidiary, Sembcorp Green Infra Limited, has signed an agreement with India Infrastructure Fund II, a fund managed by Global Infrastructure Partners India Pvt Ltd, to acquire 100 per cent interest in Vector Green Energy Private Limited (Vector Green) for a base equity consideration of approximately Rs 2,780 crore," it said in a statement.
Vector Green is an independent power producer with renewable power generation assets across 13 Indian states. The portfolio includes 495 megawatts (MW) of solar capacity and 24 MW of wind capacity in operation, with 64 MW of solar projects under development.
"Including Vector Green, Sembcorp's gross renewables portfolio installed and under development in India will total 3 GW, comprising 1 GW of solar assets and 2 GW of wind assets," it said.
The acquisition will be funded through internal cash resources and external borrowings.
Completion of the acquisition is subject to customary closing conditions and is expected by the first quarter of 2023.
Wong Kim Yin, Group President & CEO, Sembcorp Industries, said: "Sembcorp remains committed to growing its renewables portfolio in India, one of the fastest growing renewables markets in the world. This acquisition is aligned with the Group's brown-to-green transformation strategy. With the completion of this acquisition, Sembcorp's gross renewable energy capacity will increase to 8.5 GW, pushing us closer towards our 2025 target of 10 GW".
Vipul Tuli, CEO of South Asia, Sembcorp Industries, added: "This acquisition brings the significant utility-scale solar capacity to our India business, which will complement our existing wind portfolio. It also broadens and deepens our renewable energy capabilities and presence across states in India, and positions us well for further green growth in the country".