ARKANSAS, Sept 16 (Future Headlines)- In a move to bolster its clean energy portfolio, TotalEnergies is reportedly in discussions with Adani Green Energy to invest approximately $700 million in its renewable energy projects. If the deal goes through, it would mark the first major collaboration between the two companies since Hindenburg Research’s allegations shook investor confidence in Adani Group earlier this year.
Hindenburg Research had accused Adani Group of improper dealings and tax haven usage in January, causing a significant dip in the group’s shares, resulting in a loss of around $150 billion in market value. However, a Supreme Court-appointed panel later found “no regulatory failure” regarding price manipulation in Adani Group stocks, which contributed to a partial recovery of the share prices.
As of June 30, TotalEnergies held a nearly 20% stake in Adani Green and a 37.4% stake in Adani Gas, together valued at approximately $3.7 billion. TotalEnergies CEO Patrick Pouyanné had mentioned last year that the stake in Adani Green had grown from a $2 billion investment to an estimated worth of $10 billion by late 2022.
Despite this potentially significant investment, TotalEnergies had previously announced that it had not finalized a contract to extend its partnership with Adani for green hydrogen production, which was initially announced in the preceding year. In July, Adani Green revealed plans to raise 123 billion rupees (approximately $1.48 billion) through a qualified institutional placement.
Additionally, recent reports from the Organized Crime and Corruption Reporting Project unveiled that substantial sums of money were funneled into publicly-traded Adani Group stocks through funds located in Mauritius. This revelation suggested a possible “obscuring” of the involvement of alleged business partners connected to India’s Adani family. Neither TotalEnergies nor Adani Green had responded to requests for comments regarding the potential investment deal at the time of the report.
- Implications of the potential investment
TotalEnergies’ interest in investing $700 million in Adani Green Energy’s renewable projects underscores its commitment to diversifying and expanding its clean energy portfolio. The move aligns with the broader trend of oil and energy companies globally making significant investments in renewable energy as part of their transition toward cleaner energy sources.
If the investment deal proceeds, it could signify renewed confidence in the Adani Group after the allegations made by Hindenburg Research earlier in the year. A major investment from TotalEnergies would likely be perceived as a positive signal by other investors and the market in general. The investment could lead to a strategic partnership between TotalEnergies and Adani Green Energy, potentially fostering collaboration in the development and expansion of renewable energy projects, especially in India. Such collaborations could accelerate the growth of green energy in the region.
India has set ambitious renewable energy targets, and this investment could contribute to the country’s efforts to increase its green energy capacity. It could also help Adani Green Energy to fund and develop a range of renewable energy projects, including wind, solar, and hybrid solutions. Both TotalEnergies and Adani Group have recognized the growing importance of Environmental, Social, and Governance (ESG) considerations for investors. This investment aligns with their efforts to meet ESG criteria and transition toward more sustainable and responsible business practices. If the investment proves successful, it may pave the way for further collaboration between TotalEnergies and Adani Group in the clean energy sector. This could include joint ventures, technology sharing, and co-development of innovative renewable energy solutions.
Overall, this development highlights the ongoing shift in the energy landscape as traditional oil and gas companies like TotalEnergies continue to invest in and transition toward cleaner, more sustainable energy sources. It also underscores the importance of ESG considerations in the investment decisions of major energy players.
Writing by Kevin Wood; Editing by Sarah White