TotalEnergies to invest $444 million in new JV with Adani Green

The board of French oil firm TotalEnergies has approved an additional $444 million investment to set up a new joint venture with Adani Green Energy Ltd (AGEL), the Adani group firm said in an exchange filing.

AGEL, which is 19.75% owned by TotalEnergies, is developing the world’s largest renewable energy site in the Khavda region of Gujarat.

The new JV, called Adani Renewable Energy Sixty Four Ltd, will have a diverse mix of solar projects at different stages of development and with different revenue models, the company said.

Both Adani and TotalEnergies will hold 50:50% of the paid-up equity share capital in the new JV.

The joint venture will house a 1,150 megawatts of alternating current (MWac) portfolio that will comprise a mix of solar projects that are already built and generating electricity as well as those that are being developed.

The portfolio will include both merchant-based projects, which sell electricity directly to the market at variable rates, and power purchase agreements (PPA)-based projects, which have long-term contracts to sell power at predetermined prices.

“The electricity generated by the solar projects will be sold through PPAs signed with Solar Energy Corp. of India, and through sales on the wholesale market. This new transaction will allow TotalEnergies to capitalize on the ongoing liberalization of the Indian electricity market,” TotalEnergies said in a statement.

Shares of Adani Green Energy were down nearly 2% to ₹1,907.30 at 12pm on Tuesday, while the broader Sensex index was down 0.12% to 82,461.15

The companies had in September last year announced that they would form the JV in a deal that was then valued at $300 million.

The firms did not give details as to why the price has changed.

The deal will strengthen TotalEnergies’ strategic alliance with AGEL, allowing it to support the company in becoming a global renewable leader as it targets 50 gigawatts (GW) of renewable power capacity by 2030.

AGEL already operates over 11GW of solar and wind capacity in India.

The signing and completion of the transaction is subject to the approval of AGEL’s shareholders and satisfaction of customary closing conditions, including the receipt of certain regulatory approvals.

Spread across 538 sq. km, five times the size of Paris, the site will boast solar and wind capacity of 30GW. Of this, 2GW is operational. Once completed, Khavda will generate enough electricity to power the equivalent of 16 million homes in India, the company said.