Singaporean utility firm Sembcorp Industries on Monday announced the sale of its entire stake in its India unit to an Omanese consortium for Rs 11,734 crore as part of its decarbonisation drive.

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The firm will sell 100 per cent of its shares in Sembcorp Energy India Ltd (SEIL) to Tanweer Infrastructure Pte Ltd, it said in a statement.

SEIL is one of the largest independent power producers in India, operating two coal-fired power plants with a combined capacity of 2,640 MW in Andhra Pradesh. It also has a renewable energy portfolio of 1,730 MW, with another 700 MW under construction.

Tanweer will pay the acquisition price in deferred payments and Sembcorp will stay on board as a technical advisor on completion of the sale, the firm said.

Existing employees will be unaffected by the transfer.

At a media call, Vipul Tuli, CEO - South Asia, Sembcorp Industries, said the firm has no plans to exit India and this divestment will allow it to invest more in the renewable space in the country.

Sembcorp, he said, had in 2020 announced that it would not invest any further in coal-fired power projects. "We are very much sticking to that."

Post SEIL divestment, Sembcorp will continue to pursue opportunities in wind power generation, RTC power, storage and green hydrogen.

The deal is part of Sembcorp's strategy to decarbonise its operations and shift to green energy generation.

Tanweer Infrastructure is indirectly owned by a consortium led by Oman Investment Corporation S.A.O.C. (OIC) in partnership with the Ministry of Defence Pension Fund, Oman, one of Oman's largest pension funds with significant investments across power and infrastructure, and Dar Investment SPC.

OIC is a leading Omani private equity investment company with a strong track record of investments in energy and infrastructure projects, real estate, logistics, healthcare as well as asset and project management services.

It is a partner of Sembcorp in the USD 1 billion Salalah power and water plant in Oman since 2009.

Tuli said to ensure continuity of the highest standards of reliability, operational efficiency and best practices in the management of SEIL's supercritical plants, Sembcorp will continue to render technical advisory services to SEIL through a technical services agreement.

SEIL's existing operations team will continue to be employed under the new ownership of Tanweer Infrastructure.

Also, Sembcorp will provide ongoing support for SEIL's initiatives to reduce its greenhouse gas (GHG) emissions intensity. This is done through a financial incentive, where the interest rate under the DPN (deferred payment note) will reduce correspondingly with improvements in SEIL's GHG emissions intensity.

Wong Kim Yin, Group President and CEO of Sembcorp, said: "The sale of SEIL accelerates the transformation of Sembcorp's portfolio from brown to green while protecting the interests of all stakeholders."

The sale of SEIL will bring about a reduction of Sembcorp's GHG emissions intensity from 0.51 tonnes of carbon dioxide equivalent per megawatt hour to 0.32, the statement said. "Sembcorp would have achieved its 2025 target of reducing its GHG emissions intensity to 0.40 tCO2e/MWh ahead of time."

Upon completion of the sale, 51 per cent of Sembcorp's energy capacity will be renewable energy, up from 43 per cent. Sembcorp will have an energy portfolio of 14 GW, with 7.1 GW of renewable energy capacity comprising solar, wind and energy storage globally.

On a pro forma basis, Sembcorp's share of net profit from its sustainable solutions portfolio for the first half of 2022 will increase from 25 per cent to 31 per cent.