Oil major Total to invest $510 mn for 50% stake in JV with Adani Green

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Energy conglomerate Adani will be in a second partnership with French oil major Total — this time for its solar energy business. Total will invest $510 million for a 50 per cent stake in 2,148 megawatt (Mw) solar capacity, owned by Adani Green Energy (AGEL).

AGEL said it had entered into a binding arrangement with Total Gas & Power Business Services SAS for an investment of approximately $510 million for acquisition of 50 per cent stake and other instruments in a joint venture (JV) company. The JV, the statement said, would house 2,148 Mw of operating solar projects — presently 100 per cent owned by Adani Green. The balance 50 per cent in the JV will be held by AGEL. The solar portfolio is spread across 11 states in India.

The deal is expected to be complete before the end of FY20. AGEL looks to utilise the funds generated from the deal for equity funding of new projects. “We are delighted to extend our long-term partnership with Total to our renewable energy business in AGEL. The investment reinforces the immense potential in India’s renewable energy sector, as well as Adani Group’s commitment towards sustainable development,” said Gautam Adani, chairman, Adani Group.

The 2,148-Mw portfolio is AGEL’s total operating portfolio in solar. The company has another 475 Mw of solar capacity under construction.

In the wind energy space, AGEL has an operational portfolio of 347 Mw. The company aims to operate 15 gigawatt (Gw) of renewable energy portfolio by 2025. People in the know said there were no plans to move the under-construction portfolio to the newly formed JV with Total as of now. 

This is Total’s second partnership with the Gujarat-based conglomerate. In October last year, Total signed a definitive agreement to acquire 37.4 per cent stake in Gautam Adani-led Adani Gas for Rs 5,700 crore. The deal is to be executed in two parts — an open offer to public shareholders and a stake purchase from the promoters of the company. Adani Gas is hopeful of completing this deal by March this year.

For Total, the investment is a step towards meeting its own goal of 25 Gw as a renewable energy portfolio by 2025.  “This interest in over 2 Gw of solar projects represents a real change of scale of our presence in India’s renewable energy sector, which has very significant growth potential in the coming years. It will contribute to our ambition to deploy 25 Gw of renewable energy by 2025,” said Patrick Pouyanné, chief executive officer for Total.

According to Total’s website, the group’s interest in operation renewable power generation stands at 3 Gw.

THE FUTURE’S BRIGHT

• Total SA to pick partial stake in 2,148 Mw solar capacity

• Adani-Total JV to house the solar projects

• Total to invest $510 million for 50% stake in JV

• Adani Green to hold remaining stake in JV

• Deal to be completed by March-end