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Summary
- French oil and energy major Total SE has acquired 20 per cent stake in Adani Green Energy
- The French oil major aims to generate 35 gigawatts (GW) of gross renewable energy capacity by 2025
- The shares of Total were down by 0.71 per cent at EUR 36.83 on 18 January at 10:42 AM GMT
Indian multinational conglomerate Adani Enterprise Ltd (NSE: ADANIENT) has announced today that its renewable power company, Adani Green Energy Ltd (AGEL), has entered into an agreement with the French oil and energy group Total SE (EU:CA). The global energy major will acquire a 20 per cent stake in AGEL by acquiring shares held by the Adani Promoter Group (APG).
The moves is significant as Total is trying to makes a shift towards electricity and renewable energy sector by reducing its dependence on oil. The French company aims to generate 35 gigawatts (GW) of gross renewable energy capacity by 2025 from its current potential of nearly 9 GW.
(Image source: ©Kalkine Group 2021)
Details of the deal
Apart from acquiring the 20 per cent stake in AGEL, Total will also be taking up a 50 per cent stake in a 2.35 GW portfolio of operating solar assets, owned by AGEL, for a global investment of $2.5 billion under the current agreement, said AGEL in a statement.
Total said that it would get a place in AGEL’s board of directors after its purchase of the 20 per cent stake in the firm.
Presently, Adani Green Energy has a market capitalization of approximately $20.25 billion, which means Total’s stake in the company would be about $4.1 billion based on current market prices.
Total’s investment in AGEL is yet another step that it has taken to strengthen its strategic alliance across various businesses and companies of the Adani Group in India.
In 2018, Total had signed a deal with Adani Group to acquire a 50 per cent stake in Dhamra LNG project and a 37.4 per cent stake in Adani Gas Limited.
Reaction on the deal
Gautam Adani, Chairman of Adani Group, said that to enable a sustainable energy transformation in India, both the companies have shared the same aim of developing renewable power at affordable prices.
He added that Adani Group is looking forward to working together towards delivering 450 GW renewable energy by 2030. Adani Green Energy aims to generate a capacity of 25 GW of renewable energy by 2025 through organic and inorganic growth.
Patrick Pouyanné, Chief Executive Officer of Total, said that the company’s entry into AGEL marks a major milestone in its strategy of the renewable energy business in India.
Patricks said that India is the right place to deploy its energy transition strategy, given the size of the market. The company’s strategy is based on two main pillars, namely the renewables and the natural gas businesses.
