Singapore renewable energy provider Sembcorp eyes Alinta Energy

Alinta Energy’s Loy Yang B power station in the Latrobe Valley, Victoria. Picture: AFP

Alinta Energy has a new suitor – Singaporean renewable energy provider Sembcorp.

DataRoom understands that Sembcorp has recently been in Australia exploring opportunities in the renewable energy space, and had been eyeing three targets for a potential acquisition.

The company describes itself as Asia’s driver of the region’s energy transition, with a target of 25 gigawatts of renewables capacity by 2028 from its current capacity of 18.9 gigawatts.

Listed on the Singapore stock exchange with a $12.7bn market value, it operates in the areas of gas, renewable energy, and urban and decarbonisation solutions.

It is an established power gentailer offering renewable energy and also operates water treatment and soil waste management.

Sembcorp operates in most Asian markets, including China and India, as well as the UK. It has operated coal-fired power plants in India, but sold that business in 2022.

As well as Alinta, which Sembcorp is said to have been looking at, other renewable energy businesses that have been on the market in Australia include Edify Energy.

Tilt Renewables will soon have AGL Energy’s stake up for sale, and Foresight Group has had solar farms on the market through Azure Capital.

Working on a sale of Alinta has been RBC and UBS.

Alinta Energy is one of Australia’s largest energy retailers, generators and developers, growing from being the largest Western Australia gas retailer to supplying power to more than 1.1 million homes and businesses across Australia.

It owns the Loy Yang B coal-fired power station in Victoria, the Yandin wind farm in Western Australia and four gas-fired power stations in Australia as well as one in New Zealand.

Sembcorp’s interest comes after private equity firms Kohlberg Kravis Roberts and EQT both ran the ruler over the business.

Alinta has also considered a merger with one of Australia’s other major energy retailers, Energy Australia, which had also previously been on the market.

Earlier, Alinta was only planning to sell part of its business, including the Loy Yang B coal-fired power station in the Latrobe Valley.

But the coal-fired power station aspect of the business has been the least appealing to buyers.

Alinta Energy is owned by Chow Tai Fook, based in Hong Kong.

When Chow Tai Fook tried to sell the business in 2023, Goldman Sachs, UBS and Lazard were involved.

It ended up selling just its power stations, solar farm and gas pipeline to APA Group for $1.8bn.

Some believe that Goldman Sachs may now be close to Sembcorp.