Singapore-based energy and urban development company Sembcorp Industries has signed an equity transfer agreement to acquire a 35% stake in SDIC New Energy for CNY1.5bn ($235m).

SDIC New Energy has a 1.9GW portfolio of renewable assets, including 30 operational wind and solar photovoltaic (PV) assets located across seven provincial regions in China.

The deal was executed by Sembcorp’s subsidiary Sembcorp Energy (Shanghai) Holding, which signed the agreement with State Development Investment Corporate Group’s (SDIC) Shanghai SDIC Xieli Development Equity Fund Partnership (Xieli Fund).

The remaining 65% stake in SDIC New Energy will be held by SDIC’s publicly listed power arm, SDIC Power.

Sembcorp Industries Group president and CEO Wong Kim Yin said: “We are committed to achieving our group target of 10GW of gross installed renewable capacity by 2025.

“China is an important part of our brown-to-green transformation plan. We are pleased to partner with SDIC Power to grow the joint venture together.

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“Along with our recently announced 658MW acquisition, our group renewables portfolio is expected to reach a gross capacity of 6.1GW.”

Sembcorp intends to fund the deal using a combination of internal cash resources and external borrowings.

The deal is expected to close in the first half of next year subject to regulatory approvals and the signing of a joint venture agreement with SDIC Power.

Sembcorp Industries China CEO Alex Tan said: “Sembcorp is keen to build up our renewables portfolio in China, the world’s largest and fastest-growing renewables market.

“SDIC Power is a top state-owned enterprise (SOE) power company in China, with a strong track record and capabilities in the China power and clean energy industry.”

Last month, Sembcorp Energy (Shanghai) Holding agreed to acquire a 98% interest in a renewable portfolio from CGN Capital Partners Infrastructure Fund III and its affiliates in China.