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Sembcorp prices $350 mil worth of 4.6% notes due 2030

Felicia Tan
·3-min read

Sembcorp’s GoNetZero has also partnered with Instituto Totum to scale Brazil’s renewable energy certificate market.

Sembcorp Industries’ U96 wholly-owned subsidiary, Sembcorp Financial Services Pte. Ltd, has priced $350 million worth of notes under the $3 billion multicurrency debt issuance programme on March 9.

The notes are issued at 100% of their principal amount and carry a coupon of 4.6% per annum (p.a.). The notes are payable semi-annually in arrear on March 15 and Sept 15 every year.

They will be issued on March 15 and will mature on March 15, 2030.

The payment obligations of Sembcorp Financial Services under the notes will be unconditionally and irrevocably guaranteed by Sembcorp.

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Clifford Capital Pte. Ltd. has subscribed for a portion of the notes. Including the notes, the group would have secured $4.0 billion of sustainable financing to support its brown to green transformation strategy, says Sembcorp.

The proceeds arising from the issue of the notes will be used to finance or refinance new or existing projects which fall in the list of eligible green projects of the Sembcorp Green Financing Framework. The projects will also have to meet sector-specific technical criteria laid out by the Climate Bonds Initiative.

The principal amount of Clifford Capital’s investment in the notes will be used to finance eligible projects or refinance operating eligible projects. This refers to any new or existing wind, solar, or energy storage renewable projects located outside of Singapore and projects where Sembcorp has a direct or indirect ownership at an agreed percentage or higher.

The notes are expected to be listed on the SGX-ST on or about the following business day after its issue date.

GoNetZero partners with Brazil’s Instituto Totum to scale renewable energy certificate market

On the same day, Sembcorp announced that its carbon management solutions corporate venture, GoNetZero, launched its blockchain-powered digital platform for trading Brazil International Renewable Energy Certificates (I-REC). The platform was launched at the inaugural I-REC day in Sau Paulo, Brazil.

The launch is a result of GoNetZero’s partnership with Instituto Totum, the authorised local issuer of I-REC in Brazil. The partnership saw the integration of the digital platforms of Instituto Totum and GoNetZero.

Through the partnership, renewable energy generators in Brazil are now able to list their I-REC for sale directly on GoNetZero’s platform upon the issuance of the I-REC by Instituto Totum. The process offers generators faster speed to market and convenient access to GoNetZero’s global network of buyers.

According to Sembcorp, GoNetZero is now in a “strong position” to support the fast-growing renewable energy certificate market in Brazil.

Brazil has the second largest I-REC market in the world. The volume of I-REC in the country issued in 2022 doubled to 22 million from 2021. This represents green energy equivalent to powering 4.0 million four-room HDB households in Singapore for a year in 2021.

“GoNetZero supports corporates to achieve their decarbonisation goals. We are pleased to deepen our reach in Brazil and are thankful to work with Instituto Totum, a like-minded innovative partner, to support the growing renewable energy market in Brazil,” says Ng Lay San, co-founder and head of GoNetZero.

“The role of Instituto Totum is to facilitate access to the I-REC market in Brazil and this joint work with GoNetZero has achieved this objective: greater liquidity for I-REC registrants and participants and more access for buyers of any scale,” adds Fernando Giachini Lopes, founder and CEO of Instituto Totum.

Shares in Sembcorp closed at $3.80 on March 9.

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