NEW DELHI: Singapore-based Sembcorp is selling its Indian arm, Sembcorp Energy India Ltd (SEIL), to Oman’s Tanweer Infrastructure Pte Ltd for Rs 11,734 crore, or roughly $1.4 billion, as part of a plan to reduce carbon footprint, the company said on Monday.
This is easily the largest deal in India’s thermal power sector in recent times, including Gujarat-based Adani Power’s all-cash acquisition of DB Power’s 1,200 MW (megawatt) generation capacity in Chhattisgarh for Rs 7,017 crore in August.
Tanweer Infrastructure will settle the deal via deferred payment note from Sembcorp Utilities. The note will bear annual interest rate of 1.8% plus benchmark rate equal to spot rate for 10-year Indian Gilt yield minus greenhouse gas emission intensity incentive.
The deal is expected to be completed within six months of shareholders’ approval in November. Sembcorp will stay on board as technical advisor on completion of the sale. Existing employees of the Indian arm will continue to work under the new owners, the company said.
Tanweer Infrastructure is indirectly owned by a consortium led by Oman Investment Corporation in partnership with Ministry of defence Pension Fund, among 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 across energy, infrastructure and real estate, have been partners in the $1 billion Salalah water project since 2009.
SEIL operates two coal-fired power plants with a total capacity of 2.6 gigawatts (GW) in Andhra Pradesh and 1,730 MW (mega watt) renewable energy projects. It has a 700 MW green energy project under construction.
Sembcorp’s India head Vipul Tuli told a media call the company will continue to pursue green energy opportunities presented by India’s ambitious transition programme.
The divestment of the thermal power units in India reduce Sembcorp’s greenhouse gas emission from 0.51 tonnes of carbon dioxide per megawatt hour to 0.32. After the sale, the share of renewables in Sembcorp’s generation capacity will rise to 51% from 43%, the company said.
