The US$4.3 billion acquisition – expected to close in the first half of 2026, pending approvals – hands the Temasek-owned company a portfolio spanning 3.4 gigawatt (GW) of generation capacity and a 10.4 GW pipeline of renewables projects in wind and solar.
The deal includes the 1,200-megawatt Loy Yang B coal-fired power station, one of Australia’s most carbon-intensive generators, which analysts say could complicate Sembcorp’ decarbonisation ambitions.
Sembcorp said the carbon intensity of Alinta’s portfolio would reduce as its pipeline of renewables comes online.
The company would maintain operations at Loy Yang B, which supplies 20 per cent of Victoria’s power and provides “flexible and low-cost baseload electricity to support the integration of renewables into the grid,” a company spokesperson told Eco-Business.
“The need for affordable and secure energy remains critical for Australia’s energy system, even as Australia grows its renewables generation capacity,” the spokesperson said, adding that it would work with government, industry, and communities to support an “orderly transition.”
Loy Yang B is one of the three remaining coal generators in Victoria that does not have a firm closure date. More of Victoria’s coal plants will need to retire to achieve a 95 per cent renewable energy target by 2035.
Sembcorp’s chief executive Alex Tan said in an interview that it was possible that carbon capture technology could be used to abate Loy Yang B’s emissions.
Loy Yang B contributed around one quarter of Alinta’s annual earnings. Sembcorp has said that its interest in Alinta was driven by the renewables pivot, not by the coal plant. Sembcorp is targeting 25 GW of renewable capacity by 2028 and net zero by 2050.
The Alinta acquisition will enable scalable investments in renewables and balances the firm’s portfolio towards developed markets, the company said in a statement.
In October, the company bought solar assets in India from ReNew Energy Global, and it has been exploring clean energy technologies, including battery storage and hydrogen, across its Asian and European markets.
After the sale of two coal-fired power plants in India in 2022, a climate finance watchdog accused the company of carbon footprint arbitrage – arguing that structuring the sale with long-term financing allowed Sembcorp to report lower emissions intensity on paper while retaining economic links to the assets.
