Sembcorp Energy (Shanghai) Holding, a subsidiary of Singaporean energy and urban development company Sembcorp Industries, has agreed to acquire a 98% interest in a 658MW renewable project portfolio in China.

The company will acquire the assets from unlisted private equity infrastructure fund CGN Capital Partners Infrastructure Fund III and its affiliates for around RMB3.3bn ($520m).

CGN Capital Partners Infrastructure Fund III primarily focuses on renewable energy assets across China.

The portfolio consists of operational wind and photovoltaic assets located in several Chinese provinces, including Hebei, Henan and Shandong.

These renewable assets are understood to be eligible for fixed feed-in tariffs under the China renewable energy policy.

Sembcorp Industries Group president and CEO Wong Kim Yin said: “The acquisition of this renewable growth platform in China is an important step towards our target to have 10GW of gross installed renewables capacity by 2025.

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“We are focused on the execution of our growth strategy across our markets to achieve our brown to green transformation.”

Sembcorp plans to fund the deal with a combination of internal cash resources and external debt.

Sembcorp Industries China CEO Alex Tan said: “China is the world’s largest renewables market and a priority growth market for Sembcorp.

“With this acquisition, our renewables portfolio in China will double in gross capacity from 725MW to 1,400MW of wind and solar assets.

“This scalable platform will boost our growth in China and support the building of our operational and technical capabilities.”

The deal is expected to close in the first half of next year subject to certain conditions being met, including regulatory approvals.

In July, Sembcorp opened the Sembcorp Tengeh Floating Solar Farm at the Tengeh Reservoir in Singapore together with Public Utilities Board (PUB), the country’s national water agency.

The 60MWp farm covers a 45ha area and features 122,000 solar panels.