Sembcorp Industries has signed a $6.5 billion deal to acquire Alinta Energy, owner of the Loy Yang B coal-fired plant in Victoria.
The Singaporean state-owned energy giant sees the transaction as an opportunity to combine Alinta’s “local market expertise” with Sembcorp’s “global renewables capability”, in an attempt to drive renewables growth in Australia.
Having been owned by Chow Tai Fook Enterprises Limited (CTFE) since 2017, Alinta has become one of Australia’s largest gentailers, with gas- and coal-fired generation assets strewn across the country.
Alinta also part owns the 214MW Yandin wind farm located about 175km north of Perth.
Sembcorp, on the other hand, boasts a 28.3GW portfolio of renewables, storage and gas assets across the Asia Pacific, the Middle East and Europe, and runs Singapore’s largest utility-scale energy storage system.
Sembcorp is clearly pushing a renewables agenda, having invested more than $5.9 billion in renewable energy projects since 2020, boosting its renewables capacity from 3.2GW to 20.2GW through both mergers and acquisitions (M&A) and greenfield developments.
With 75 per cent of its capital investment focused on renewables, the company’s goal is to reach 25GW in renewables assets by 2028.
Sembcorp’s plan for Australia
Sembcorp sees Australia as a “key market” to helping it achieve its 25GW by 2028 renewables goal.
“The company is committed to redeploy capital into Australia to execute Alinta’s pipeline of renewable development projects,” a Sembcorp statement said.
“The acquisition will increase Sembcorp’s generation portfolio exposure capacity in developed markets from 25% to 31%, deepening its presence in markets with clear policy frameworks and growing energy demand.
“Sembcorp recognises that Australia’s energy sector is seeking to decarbonise while delivering reliability and affordability.
“As new renewables capacity is developed, existing generation assets such as the Loy Yang B power station are playing a critical role in providing secure, low-cost and flexible baseload power to maintain grid stability and support households and industry.”
Without confirming its specific plans for Loy Yang B, which is slated for closure in 2047, Sembcorp said it will “work constructively and in tandem with government, industry and communities to deliver both reliable and affordable power and support energy transition policies”.
No changes will be made to Alinta’s existing management team and operational structure, with Alinta managing director and chief executive officer Jeff Dimery to continue to lead the company’s day-to-day operations.
The acquisition will navigate the usual approvals, including Sembcorp shareholder approval and a greenlight from Australia’s Foreign Investment Review Board and the Australian Competition and Consumer Commission.
The transaction is set to be completed in the first half of 2026.
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