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Race for GIP-backed Vector Green Energy: Singapore’s Sembcorp emerges as frontrunner

Sembcorp Industries had recently announced that had exited its thermal power business in India by selling its coal-fired power units to Oman’s Tanweer Infrastructure Pte for around $2.1 billion.

September 22, 2022 / 07:23 PM IST
Representative Image

Representative Image

Sembcorp, a top energy and urban solutions provider has emerged as the lead contender to acquire Vector Green Energy, the Indian renewable energy platform of US private equity firm Global Infrastructure Partners ( GIP), multiple industry sources with knowledge of the matter told Moneycontrol.

The interest in the transaction, one of the biggest in the clean energy segment in India, is part of the Singapore-based firm’s strategy to revamp its portfolio from brown energy to green energy.

“Sembcorp has edged ahead of other suitors and entered exclusive negotiations with GIP for the buyout of Vector Green Energy,” said one of the persons above.

Two other persons confirmed the above to Moneycontrol saying Sembcorp was currently favourably placed to clinch the deal.

All three persons above spoke to Moneycontrol on the condition of anonymity.

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Earlier reports had named Torrent Power, JSW Energy and Apraava Energy( formerly CLP India) as suitors for the proposed transaction and pegged the deal value around Rs 5,000 crore.

Moneycontrol has sent reminders and is awaiting responses to email queries sent to Sembcorp, GIP and Vector Green Energy. This article will be updated as soon as we hear from these firms.

A Closer Look At The Target – Vector Green Energy

Vector Green Energy is a renewable, energy-focused Independent Power Producer (IPP) which has operating wind and solar power generation projects across India. It is wholly owned by funds managed by Global Infrastructure Partners India, the Indian affiliate of Global Infrastructure Partners (GIP) – a leading global independent infrastructure fund manager. GIP manages assets worth over $71 billion including renewable assets of more than 15GW.

According to its website, Vector has grown to a portfolio of 742MWp of contracted capacity with another 1041 MWp of investment-ready renewable projects and 1,217 MWp of pipeline projects in India. Of this, currently, 652 MWp is operational which is spread across 19 ground-mounted utility-scale projects located across 8 states as well as 89 rooftop solar projects on 216 roofs across 7 states in the country.

The Sembcorp India Strategy

Sembcorp Industries had recently announced that had exited its thermal power business in India as part of which its wholly-owned subsidiary Sembcorp Utilities entered into a share purchase agreement to sell 100% of the shares of Sembcorp Energy India Limited (SEIL) to Oman’s Tanweer Infrastructure Pte for around $2.1 bn. SEIL is one of the largest independent power producers in India, operating two supercritical coal-fired plants totalling 2.6GW.

ALSO READ: Singapore’s Sembcorp Industries to sell India coal-fired power units to Oman’s Tanweer Infrastructure

“Sembcorp remains highly committed to the Indian market because we believe it is one of the fastest growing power markets in the world and one of the most ambitious energy transition programs in the world. That opens up numerous opportunities for us in the renewables and clean energy space,” the firm’s India operation head Vipul Tuli told Moneycontrol.

“We continue to seriously evaluate multiple additional wind, solar and other green opportunities within India. So we expect our investments in India to not only continue but actually be accelerated in strength as a result of this transaction,” Tuli added.

The company has a green energy portfolio of 1,730 megawatts (MW) of operational capacity and another 700 MW under execution.
Ashwin Mohan
first published: Sep 22, 2022 07:23 pm
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