Sembcorp: Weighing options on coal-fired power assets in green push

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Sembcorp Industries said Thursday that as part of its move to shift its portfolio “from brown to green,” it was “actively developing various options,” particularly for its coal-fired power assets.

The statement, which was filed to SGX, was aimed at clarifying a Bloomberg report on the company’s Indian power assets.

Bloomberg had reported Wednesday, citing people with knowledge of the matter, that Larsen & Toubro was in talks to merge its thermal power business with Sembcorp Industries’ Indian unit. The share-swap deal was aimed at helping L&T pare debt in a transaction that could value the business at around US$4.5 billion, the people said, according to the report, which added Sembcorp’s renewable energy business would be excluded from the deal.

In its statement, Sembcorp Industries said it hasn’t decided on any option or course of action yet.

“The company believes that over the period leading to 2025 and 2030, it will be able to develop and implement solutions that will enable it to meet its climate action targets, while optimising value for shareholders,” Sembcorp said.

On Wednesday, Sembcorp priced S$675 million in sustainability-linked bonds (SLB) due 2032. The bonds have a sustainability performance target for Sembcorp to lower its greenhouse gas (GHG) emissions intensity to 0.4 tonnes of carbon dioxide equivalent per megawatt hour (tCO2e/MWh) or lower by end-2025.

GHG emissions intensity is defined as the group’s total greenhouse gases from direct emissions from its activities, indirect emissions from its energy consumption and biogenic emissions from bioenergy feedstock, divided by the total energy generated and purchased.

Sembcorp Industries has previously said its GHG emissions intensity in 2020 was at 0.54 tCO2e/MWh, down from 0.55 in 2019 and 0.56 in 2018. The company has set a goal of reducing its GHG emissions intensity to 0.4 tCO2e/MWh by 2025, or a 25 percent reduction from 2020 levels, in line with the long-term goal of the 2015 Paris Agreement to limit global warming. The company has previously said it is targeting net-zero emissions by 2050.