Sembcorp sells India’s energy arm to Oman Fund for $1.4 billion – Times of India

New Delhi: Singapore based Sembcorp Selling his Indian arm, Sembcorp Energy India Limited (SEIL), for Oman Tanveer Infrastructure The company on Monday said it has bought Pte Ltd for Rs 11,734 crore, or roughly $1.4 billion, as part of its plan to reduce its carbon footprint.
It is easily the biggest deal in India’s thermal power sector in recent times, including the acquisition of DB Power’s 1,200 megawatt (MW) generating capacity in Chhattisgarh by Gujarat-based Adani Power for Rs 7,017 crore in August.
Will settle the deal through deferred payment note by Tanveer Infrastructure Sembcorp Utilities, The note will have an annual interest rate of 1.8 per cent plus the 10-year Indian gilt yield minus the benchmark rate equivalent to the spot rate for greenhouse gas emission intensity incentives.
The deal is expected to be completed within six months of shareholders’ approval in November. Sembcorp will continue on the Board as Technical Advisor upon completion of the sale. The company said the existing employees of the Indian unit will continue to work under the new owners.
Tanveer Infrastructure is indirectly owned by a consortium led by Oman Investment Corporation in partnership with the Ministry of Defense Pension Fund, which is one of the largest pension funds in Oman with investments in power and infrastructure projects and Dar Investments.
Sembcorp and Oman Investment Corporation, a leading private investment fund in that country with investments in energy, infrastructure and real estate, have been partners in the $1 billion Salalah water project since 2009.
SEIL operates two coal-fired power plants in Andhra Pradesh with a total capacity of 2.6 gigawatts (GW) and 1,730 MW (MW) renewable energy projects. In this, a 700 MW green power project is under construction.
Vipul Tuli, India Head, Sembcorp, told a media call that the company will continue to pursue the green energy opportunities presented by India’s ambitious transition programme.
The disinvestment of thermal power units in India reduces Sembcorp’s greenhouse gas emissions from 0.51 tonnes of carbon dioxide per megawatt hour to 0.32. Post the sale, the share of renewable energy in Sembcorp’s production capacity will increase from 43 per cent to 51 per cent, the company said.