AES sells Chinese wind energy assets to Sembcorp in $85.5m deal

Sembcorp Utilities, a whollyowned subsidiary of SGX-listed Sembcorp Industries has signed a transaction with the New York-listed AES Corp to acquire part of its power asset portfolio in China for S$106.7 million ($85.5 million), according to the company’s news release on Monday.

The acquisition comprises a 49 percent stake in four wind power assets owned through AES Huanghua, AES Hulunbeier Wind Power Co, AES Xinba’erhu Wind Power Co and AES Chenba’erhu Wind Power Co, as well as a 25 percent stake in a coal-fired power plant owned through AES China Corp.

They’re Sembcorp’s first wind power assets in China, which may strengthen the company’s global energy portfolio and help them to tap into the fast-growing wind power market. After the transaction, the Sembcorp will expand its development in renewable energy sector, including wind in addition to biomass.

Tang Kin Fei, Group President and CEO of Sembcorp, said, "We are excited about the growth prospects and immense opportunities that this acquisition will bring to Sembcorp. This transaction is set to further extend Sembcorp’s presence in China as an established energy and water player. With the inclusion of Inner Mongolia and Shanxi, we will have utilities operations in 11 provinces across the country."

The wind power assets comprise three wind power plants in Inner Mongolia and one wind power plant in Hebei with a total gross power capacity of 247.5 megawatts. The remaining 51 percent stakes of these Joint Ventures belong to Guohua Energy Investment Co, which is owned by Shenhua Group Corp, a state-owned mining and energy company in China and the largest coal-producing company in the world.

In addition, the coal-fired power plant locating in Shanxi has its power generation capacity of 2,100 megawatts. The Cooperative Joint Venture expires in 2016.

Sembcorp, founded in 1998 and a Singapore-based leader in providing utilities, marine and offshore engineering, has its market capitalization of S$9.3 billion. Its turnover in financial year 2011 was S$9 billion, while its net profit in 2011 was about S$809.3 million.