French oil and energy group Total has agreed to buy a 20% minority stake in India’s Adani Green Energy Limited (AGEL) from Adani Group, as Total builds up its presence in the renewable energy sector. Total said on Monday that its purchase of the stake in AGEL would give Total a seat on the board of directors of AGEL. Total and Adani had earlier struck a partnership deal back in 2018 in the liquefied natural gas (LNG) sector.
Total is trying to reduce its dependence on oil and shift towards electricity and renewable energy. It aims to have 35 gigawatts (GW) of gross renewable energy generation capacity by 2025 from around 9 GW now. Adani Green Energy has a market capitalization of about 1.483 trillion Indian rupees ($20.25 billion), and a 20% stake in the company would be worth about $4.1 billion based on current market prices.
“Our entry into AGEL is a major milestone in our strategy in the renewable energy business in India put in place by both parties,” Total CEO and Chairman Patrick Pouyanne said. “Given the size of the market, India is the right place to put into action our energy transition strategy based on two pillars: renewables and natural gas,” he added. Total and Adani added they had agreed on the acquisition of a 50% stake in a 2.35 GWac portfolio of operating solar assets owned by AGEL and a 20% stake in AGEL for a global investment worth $2.5 billion.
The investment in AGEL is another step in the strategic alliance between Adani Group and Total, across various businesses and companies of the Adani Group, covering investments in LNG terminals, gas utility business, and renewable assets across India. In 2018, Total and Adani embarked on the energy partnership with investment by Total in Adani Gas Limited, city gas distribution business, associated LNG terminal business and gas marketing business.
Total acquired 37.4% stake in Adani Gas Limited and 50 percent stake in Dhamra LNG project. During the development of this partnership, it was further agreed that Total and Adani shall continue this alliance into the wider sustainable energy space. India has set a policy target of setting up 450 GW of renewable power capacity by 2030. In this context, Adani Group and Total have joined hands to develop green power sources at affordable prices and to deliver transformational energy solutions.
