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Published on: Jan. 25, 2021, 3:26 p.m.
Adani, Total strike a strategic alliance
  • Both agreed upon the acquisition of a 50 per cent stake in a 2.35 GW portfolio of operating solar assets owned by AGEL

By Arbind Gupta. Assistant Editor, Business India

Global energy major Total has announced the acquisition of a 20 per cent minority interest in Adani Green Energy Ltd (AGEL) from the Adani group. The transaction marks the deepening partnership between the Adani group, India’s leading infrastructure platform, and Total, which is in the transition and green energy fields in India. The investment in AGEL strengthens the strategic alliance between Adani group and Total, which covers investments in LNG terminals, gas utility business, and renewable assets across India. This is in line with the commitment of both the Adanis and Total to be leading participants in the sustainable economy of the future and help India in its quest for development of renewable energy.

In 2018, Total and Adani had embarked on the energy partnership with an investment by Total in Adani Gas’ city gas distribution business, associated LNG terminal business and gas marketing business. During the development of this partnership, it was further agreed that they both would continue this alliance into the wider renewable energy space. Both agreed upon the acquisition of a 50 per cent stake in a 2.35 GW portfolio of operating solar assets owned by AGEL and a 20 per cent stake in AGEL for a total investment of $2.5 billion. Along with this 20 per cent minority interest in AGEL, Total will have a seat on the board of directors of the company too.

AGEL’s projects benefit from the nearly 25-year-old power purchase agreements (PPA) with national and regional electricity distributors, at a fixed rate. Total and AGEL will create a 50:50 joint venture, into which AGEL will transfer its solar assets in operation. These projects, spread over 11 Indian states, have a cumulative capacity of over 2 GW. 

Major milestone

“This agreement is an important step in our alliance with the Adani group in India,” says Patrick Pouyanné, chairman & CEO, Total. “We have a common vision and goals with respect to the importance of access to low carbon energy in India. Our entry into AGEL is a major milestone in our strategy in the renewable energy business in India put in place by both parties. 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”.

“We are delighted to deepen our strategic alliance with Total, a global energy major, and welcome them as a significant shareholder in AGEL,” says Gautam Adani, chairman, Adani group. “We have a shared vision of developing renewable power at affordable prices to enable a sustainable energy transformation in India. We look forward to working together towards delivering India’s vision of 450 GW renewable energy by 2030”.

AGEL, a listed company, of which 74.92 per cent is owned by the Adani Group, was set up in 2015 and runs the world’s largest single location solar power project (648 MW) located in Kamuthi, Tamil Nadu. It has come a long way to be the number one global solar power generation asset. As on date, AGEL has over 14.6 GW of contracted renewable capacity, with an operating capacity of 3 GW and another 3 GW under construction and 8.6 GW under development. The company aims to achieve 25 GW of renewable power generation by 2025.

The partnership with AGEL in the renewables space in India will be a key contributor to Total’s objective of reaching 35 GW of gross production capacity from renewable sources by 2025 and adding 10 GW per year afterwards. As one of the leading private players in the Indian renewables market, AGEL holds a portfolio of 2,148 MW of installed solar capacity and 172 MW of installed wind capacity. It also has 475 MW of solar capacity and 1,505 MW of wind and 990 MW of hybrid under construction.

Total, active in more than 130 countries and with an ambition to become the responsible energy major, has integrated climate change into its strategy. It is staying ahead of new energy market trends by building a portfolio of low-carbon businesses that could account for 15-20 per cent of its sales by 2040. Total’s gross low-carbon power generation capacity worldwide is close to 7 GW, of which over 3 GW comes from renewable energies. 

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