Singaporean giant buys major Australian power company for $6.5 billion

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A Singaporean energy giant has struck a $6.5 billion deal to buy Australia’s fourth-largest power generator and retailer, Alinta, as it outlines plans to invest in a major build-out of renewable energy across the country.

The deal, announced late on Thursday night, ends months of talks between Alinta’s owners and Singapore-listed Sembcorp Industries, and marks one of the most significant foreign forays into Australia’s energy market in years.

Alinta owns Victoria’s Loy Yang B coal-fired power station.

If it gains regulatory clearance, Sembcorp will acquire all of Alinta’s operations, including its retailing business with 1.1 million customers, and generation assets spanning renewables, gas plants and the huge Loy Yang B coal-fired power station in Victoria’s Latrobe Valley.

Buying Alinta would provide Sembcorp with a platform to “accelerate renewables growth in Australia”, the company said. Sembcorp has named Australia as a key market for its ambitions to grow its global renewable energy portfolio to 25 gigawatts by 2028.

“By combining Sembcorp’s global renewables expertise and access to capital with Alinta’s strong local workforce and project pipeline, we believe we can contribute meaningfully to Australia’s decarbonisation goals and support long-term employment opportunities in local communities,” said Alex Tan, Sembcorp’s regional president of renewable energy.

Australia is experiencing one of the world’s fastest energy transitions as polluting coal-fired generators, which still supply most of the grid’s electricity, approach the end of their lives, while wind and solar farms, household rooftop solar panels and batteries are expanding their role in the grid every year.

However, officials are worried that the rollout of new generators, storage assets and powerlines is lagging the speed needed to keep electricity supply and prices stable as the next wave of coal-fired power plant closures nears, and are calling for an urgent increase in investment.

More to come