According to a power company executive, Asia’s move to renewable energy might be accelerated

According to a senior executive from Sembcorp Industries, which is a Singapore-centered power and urban development corporation, Asia may accelerate its shift to the renewable energy. Eugene Cheng, who serves as the company’s group CFO (chief financial officer), informed CNBC’s “Squawk Box Asia” from the climate summit Ecosperity Week, “Definitely in terms of expediting the shift, we could go faster.”

Cheng was questioned if the world’s delayed progress toward renewable power and net-zero carbon pollution was due to rising gas costs across Europe and a continuing power shortage in China. Renewable energy provides for over 20 percent of the average energy generation in Asia, according to the executive, compared to over 40% in Europe. “So, I believe we need to accelerate the transformation, and that will require a collaboration between governments and the private sector,” he said.

Sembcorp issued a “sustainability-linked bond” to generate $496 million (675 million Singapore dollars). The coupon rate on the 10.5-year bond is 2.66 percent, but it will be hiked by 25 basis points if corporation fails to fulfil its carbon intensity reduction target. To fulfill the target, Sembcorp plans to quadruple its renewable energy generation capacity to 10 gigawatts by the year 2025, according to Cheng. He noted that the company is expanding its renewable energy projects throughout Asia, with an emphasis on wind and solar projects in India, China, and Southeast Asia.

Sembcorp Industries (Sembcorp) has become a renowned firm that specializes in energy and urban development. Sembcorp’s marine division supplied a range of services, including offshore platform engineering and construction, until it got demerged from Sembcorp in the year 2020 due to poor financial performance. Sembcorp has a global energy portfolio of more than 12,600MW, including over 2,600MW of the renewable energy capacity. With a project inventory of more than 12,000 hectares across Asia, the business also converts raw land into urban complexes.

Sembcorp is traded on the Singapore Exchange’s main board. The FTSE4Good Index, the iEdge SG ESG indexes and Dow Jones Sustainability Asia Pacific Index are all component stocks of Straits Times Index.

Sembcorp stated in March 2020 that its CEO would be replaced. Sembcorp did not issue an interim dividend for the first half of 2020, instead deferring any decision on dividend payment for the fiscal year 2020 till the conclusion of the year. Trading for Sembcorp and Sembcorp Marine, which is a loss-making unit whose shares had fallen by 36% in 2020, was halted in June of that year. Both firms’ representatives declined to comment. The share price of Sembcorp Industries fell by 11% from June 11 and July 24, 2020.

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