ARKANSAS, Sept 21 (Future Headlines)- TotalEnergies SE (Total), a global energy powerhouse, has committed to invest $300 million in a new clean energy joint venture with the Adani group, known as Adani Green Energy Ltd (AGEL). This strategic partnership represents Total’s re-engagement with the Adani conglomerate following prior controversies, marking a significant milestone in their collaborative efforts to drive renewable energy growth in India.
Under this arrangement, Total will hold a 50% stake in the joint venture, while AGEL will retain the remaining 50%. This substantial financial commitment underscores Total’s renewed confidence in its strategic partnership with the Adani group and its commitment to the Indian renewable energy sector.
The joint venture will amalgamate a diverse portfolio of renewable energy assets, including solar and wind power. The joint venture will start with 300 megawatts (MW) of operational capacity, reflecting existing renewable energy projects that are actively generating electricity. An additional 500 MW of capacity is attributed to projects currently under construction, indicating a strong pipeline of renewable energy assets that are poised to become operational in the near future. The joint venture also includes 250 MW of assets that are in the development phase. These projects are in the early stages of planning and construction.
This investment marks a pivotal moment in TotalEnergies’ ongoing strategic alliance with AGEL. One of the primary objectives of this partnership is to support AGEL in achieving its ambitious target of attaining 45 gigawatts (GW) of renewable power capacity by 2030. This target underscores AGEL’s commitment to significantly contribute to India’s renewable energy generation and carbon reduction goals. To fully appreciate the significance of this investment, it’s essential to acknowledge the historical context. Prior to this venture, TotalEnergies had temporarily halted a $4 billion green hydrogen joint venture with the Adani group following allegations made in the Hindenburg report. The decision to put the green hydrogen project on hold was a result of the need to address concerns and ensure due diligence.
However, this clean energy joint venture signifies a renewal of trust and cooperation between the two entities, highlighting their commitment to advancing renewable energy and sustainability in India. TotalEnergies’ engagement with AGEL is not a novel occurrence. In 2021, the French energy company acquired a minority interest of nearly 20% in AGEL. This strategic investment reflected TotalEnergies’ belief in the growth potential of AGEL and its dedication to renewable energy initiatives in India.
Furthermore, TotalEnergies and the Adani group share another significant partnership – Adani Total Gas. In this venture, both parties have equal stakes, with the Adani family and other promoter firms holding 37.40%, and TotalEnergies Holding SAS maintaining a similar stake. This collaboration extends beyond renewables and encompasses the broader energy landscape, emphasizing the multifaceted nature of their partnership.
AGEL has communicated this new investment in a regulatory filing. The filing outlined the key terms of the investment, the creation of the 50:50 joint venture, and modifications to TotalEnergies’ existing investment in AGE23L, an arm of Adani Green Energy. The announcement of this significant investment had a notable impact on AGEL’s share performance. On a day when the benchmark index experienced a substantial decline of nearly 800 points, AGEL’s shares managed to close with marginal gains. The closing price of Rs 1,012.50 represented a 0.79% increase over the previous closing price. This resilient share performance signals investor confidence in AGEL’s strategic collaborations and its role in India’s renewable energy sector.
TotalEnergies’ $300 million investment in the clean energy joint venture with AGEL carries several implications for the renewable energy sector in India and globally. The injection of substantial capital into renewable energy projects in India bodes well for the sector’s growth and expansion. This investment will fund the development of both operational and upcoming projects, bolstering the country’s renewable energy capacity.
The collaboration between TotalEnergies and AGEL highlights the importance of strategic partnerships in the renewable energy landscape. Such partnerships foster technology transfer, knowledge sharing, and joint efforts to achieve renewable energy targets. The growth of renewable energy assets contributes to India’s economic development while simultaneously reducing carbon emissions. AGEL’s commitment to achieving 45 GW of renewable power capacity by 2030 aligns with India’s broader goals to transition to a greener, more sustainable energy mix.
The positive response from investors, as reflected in AGEL’s share performance, underscores the attractiveness of renewable energy investments. This vote of confidence is likely to encourage further investments in the sector, driving innovation and competitiveness. TotalEnergies’ participation in this joint venture signifies the global relevance of India’s renewable energy sector. International energy giants recognize the country’s potential as a renewable energy hub and are eager to participate in its growth story. The joint venture aligns with global sustainability and climate goals, including the Paris Agreement’s targets to limit global warming. By expanding renewable energy capacity, India contributes to the global fight against climate change. The positive response from investors, as evidenced by AGEL’s share performance, reflects the growing interest and confidence in India’s renewable energy sector. This influx of capital and expertise not only fuels the sector’s growth but also strengthens India’s position on the global renewable energy stage.
Writing by Kevin Wood; Editing by Sarah White