A significant shift in the Australian energy sector has occurred as Singapore-based Sembcorp announced a deal to acquire Alinta Energy for $6.5 billion. This acquisition marks a strategic move to bolster Sembcorp’s footprint in the renewable energy market, aiming to enhance its capabilities in Australia. Alinta Energy, the largest privately-owned energy retailer in Western Australia, will transition from Hong Kong’s Chow Tai Fook Enterprises, which purchased the company for approximately $4 billion in 2017.
Sembcorp’s Renewables Ambitions
Sembcorp has made significant investments in renewable energy over the past few years, channeling over $5.9 billion into projects globally since 2020. This acquisition is expected to further accelerate Sembcorp’s growth in Australia, where it seeks to expand its renewable energy capacity to 25 GW by 2028. According to the companies, the combination of Alinta’s local expertise with Sembcorp’s global renewable capabilities will create a robust platform for growth in this rapidly changing energy landscape.
Alinta Energy operates power stations across Victoria, Queensland, Western Australia, and New Zealand, and is particularly known for owning the largest retail gas network in the South West region. The company generates approximately 900 megawatts of power annually through various facilities, including gas-fueled power plants and a wind farm.
Commitment to Energy Transition
In a joint statement, Sembcorp emphasized its commitment to supporting a responsible energy transition while ensuring grid reliability. The company stated that the acquisition provides access to an attractive portfolio of development opportunities, comprising 10.4 GW of renewable energy systems and firming technologies. Sembcorp highlighted the necessity of existing generation assets, such as the Loy Yang B power station, during this transition period.
The statement noted, “As new renewables capacity is developed, existing generation assets play a critical role in providing secure, low-cost, and flexible baseload power to maintain grid stability.” Furthermore, Sembcorp is committed to collaborating with government entities, industry stakeholders, and local communities to deliver affordable energy solutions while navigating the challenges of decarbonization.
Jeff Dimery, Alinta’s long-standing chief executive, will continue to lead the management team. He acknowledged the acquisition as a significant endorsement of both Australia and Alinta Energy. “Sembcorp’s investment is a vote of confidence that will provide long-term job security and enable us to scale responsibly while advancing projects aligned with Australia’s clean energy future,” Dimery stated.
The finalization of the deal hinges on the approval of Sembcorp shareholders, along with clearance from the Foreign Investment Review Board and the Australian Competition and Consumer Commission. This acquisition not only reflects Sembcorp’s ambition to enhance its renewable energy portfolio but also signifies a pivotal moment for Alinta Energy as it prepares to navigate the evolving energy landscape under new ownership.
