NEW DELHI (Sept 5): Sembcorp Industries Ltd will sell its India coal power business for 117 billion rupees (US$1.5 billion) to Oman’s Tanweer Infrastructure Pte Ltd, the Singapore-based energy producer said, as it seeks to decarbonize its portfolio.

Sembcorp, which operates two coal-fired plants in India with a combined capacity of 2.6 gigawatts, said in an exchange filing on Monday that the sale of the business will accelerate its shift from “brown to green”. Tanweer, which will become the sole shareholder of the India thermal business, will pay via deferred payment notes issued by Sembcorp, according to the statement.

The company’s shift toward greener assets in India, the world’s third-largest emitter of greenhouse gases, comes as the South Asian nation plans an unprecedented expansion in renewable energy to reduce its dependence on fossil fuels. But the purchase by Tanweer underscores how coal is expected to remain a mainstay of India’s energy mix for years to come.

Sembcorp said in an online briefing that it remains committed to the Indian market. The sale of the coal power business will free up resources for green investments in the country, it said, adding that the company is evaluating several opportunities, including round-the-clock renewable projects, storage and green hydrogen.

Sembcorp plans to hold an extraordinary general meeting in November to seek shareholders’ approval of the transaction, and expects to close the deal six months later, it said. After the completion of the sale, the share of renewables in Sembcorp’s total energy capacity will rise to 51% from 43%, according to the statement.

Sembcorp’s greenhouse gas emissions intensity will drop to 0.32 tonnes of carbon dioxide equivalent per megawatt hour, from 0.51 tonnes.

Tanweer Infrastructure will retain the existing operations teams at the two plants and Sembcorp will continue to offer technical advisory services to ensure continuity. Tanweer is owned by a consortium that includes Oman Investment Corp and Dar Investment SPC.