Singapore-based and Temasek-backed energy company Sembcorp Industries Ltd is acquiring more than 200MW of operational wind power assets from an Indian green energy firm owned by the family of a well-known Indian sportsperson for S$70 million ($52.4 million or Rs 437 crore).
This deal is part of a larger S$200 million acquisition that saw Sembcorp acquire two more assets of 200MW in China from Qinzhou Yuanneng for S$130 million.
Sembcorp, which has managed to turn its fortunes around in India, bought the Indian assets from Leap Green Energy Pvt. Ltd, which is controlled by the Coimbatore, Tamil Nadu-based family of Narain Kartikeyan, India’s first formula one racing driver.
Sembcorp has been looking to move away from fossil fuels and towards green energy, and buying a part of Leap Green’s assets seems to have been an easy pick to shore up its Indian portfolio. Leap Green has had a rough ride over the last few years and so its assets might have been a relatively inexpensive buy for Sembcorp.
In January 2020, VCCircle noted in an analytical report how Leap Green, which was set up in 2009, had been facing headwinds. The report noted how Leap Green’s profits turned to losses and its consolidated debt more than doubled.
Having said that, since then Leap Green seems to have worked on turning its fortunes around, a bit. Company financials mapped by VCCEdge, the in-house data analytics platform of VCCircle, show that Leap Green booked a consolidated net loss of Rs 74.7 crore for 2019-20. The following year, it managed to halve that number to Rs 37.9 crore. In fact, in 2021-22, the company was in the green, clocking a consolidated net profit of Rs 1.28 crore.
Sembcorp has been operating in India for more than a decade now. It has a 3.7 GW portfolio of renewable assets—2.25 GW of wind and 1.45GW of solar—spread across 18 states.
Sembcorp said in a release that it will buy Leap Green’s assets via its wholly owned Indian subsidiary Green Infra Wind Energy Ltd. Last year, it acquired 538MW of assets from Vector Green Energy from US private equity firm Global Infrastructure Partners.
Sembcorp said it had inked agreements to secure 673MW of renewables capacity since it announced its 2028 target to achieve 25GW of gross installed renewables capacity. This includes the proposed acquisition of 245MW of renewables assets in Vietnam, announced on Nov. 10, 2023. Upon completion of these acquisitions, Sembcorp’s gross renewables capacity will reach 12.6 GW globally.
In September last year, Sembcorp sold local unit Sembcorp Energy India Ltd, which housed two thermal power plants in Andhra Pradesh, to the Omani consortium Tanweer Infrastructure Pte Ltd for Rs 11,734 crore, or around $1.4 billion.
Sembcorp began reorganising its India energy assets in 2018, to streamline its shareholding. This, VCCircle noted the following year, helped Sembcorp’s India arm to swing to a profit after racking up losses in the previous two years.
By December 2021, it had completed the restructuring process, making the thermal and renewable energy businesses step-down subsidiaries of Sembcorp India. It then sold the thermal business to focus on the renewable business.
The company said it will fund the latest acquisitions through a mix of internal cash resources and external fundings. It expects to close the transactions by the first half of 2024.