Sembcorp Industries, a subsidiary of Singapore’s sovereign wealth fund Temasek Holdings, recently announced plans to invest 10.5 billion (USD 7.8 billion) in renewables by 2028. Sembcorp Industries already has renewable energy holdings with over 9GW of generation capacity. Under the new plan, the company hopes to add an additional 13GW over the next four years.
Several of Sembcorp Industries’ key markets – including Singapore, China, India, and Indonesia – are struggling to reduce greenhouse gas emissions. Singapore’s National Climate Change Secretariat released data showing that the city-state’s greenhouse gas emissions reached record levels in 2021. In addition, the Global Energy Monitor states that 89% of world’s coal-fired power plants in currently under construction are located in China, India, and Indonesia. Governments in the Asia-Pacific region have shown that they will not sacrifice economic growth and transition away from fossil fuels without viable alternatives. Capital from companies like Sembcorp Industries should help these countries take step towards meeting their pledges and targets on emissions reductions.
But allocating funding to new renewable energy projects is only the first step. To see its plans to fruition, Sembcorp Industries will need to confront enduring systemic challenges in the region, including lengthy licensing and approvals processes, ambiguity in acquiring land titles, and corruption of local officials overseeing connections to public grids. Detailed market entry studies, government stakeholder mapping exercises and due diligence of local corporate counterparties are some of the steps that Sembcorp Industries must take to overcome these challenges and ensure that its pledged investments result in sustainable energy supplies.
Sembcorp Industries will invest about $10.5 billion in renewables, it said on Monday in its 2023-2028 strategic plan announcement. The investment comes as the energy player looks to grow its gross installed renewable capacity and halve its emission intensity by 2028. The $10.5 billion sum translates to 75 per cent of its 2024 to 2028 total investments.
