Total Energies, the French Giants in Green Energies have corroborated with Adani Green Energy Limited (AGEL) and have invested around $100 Million which is approximately RS 2500 Crore. The Adani group firm and the French giant will own 50:50 stake in the company which in turn will house a 1,050 MW project portfolio.
“TotalEnergies has acquired a 50% stake in Adani Renewable Energy Nine Ltd (ARE9L) for an amount of $300 million,” Adani Green Energy Ltd (AGEL) said in a stock exchange filing. ARE9L is a subsidiary of AGEL.
The 1,050 MW project portfolio includes 300 megawatts (MW) of operational capacity, 500 MW of under-construction solar projects and 250 MW of under-development projects.
TotalEnergies, which holds about 19.75% stake in AGEL, had previously invested in Adani Green Energy Twenty Three Ltd, another subsidiary of AGEL.
“As per the valuation report dated November 27, 2023 obtained from Mazars Advisory LLP, an independent valuer, the aggregate valuation of the project portfolio companies is equivalent to $489 million,” AGEL said in a notice to shareholders seeking approval for the TotalEnergies deal.
“As part of the transaction, Total Energies will acquire a 50% stake in ARE9L, which will house this Project portfolio companies, for an amount of $300 million which are terms more beneficial to the company (AGEL).”
Upon the under-construction and under-development projects achieving commercial operations, TotalEnergies will also invest an additional amount to be determined based on actual project cost subject to certain parameters around the project cost and timelines.
“Such further funding by TotalEnergies will be over and above the initial investment of $300 million and will be subject to suitable approvals as may be required,” it added.
The French firm infused an amount of Rs 4,013 crore into AGE23L by subscribing to compulsorily convertible debentures issued by AGE23L, which have been used to redeem the existing non-convertible debentures held by TotalEnergies.
“The (Wednesday’s) transaction also reinforces the strategic alliance between the company (AGEL) and TotalEnergies and will support the company in becoming the Indian leader of renewable energy, with a target of 45 GW renewable power capacity by 2030,” the notice said.
Later in a statement, AGEL said the 1,050 MW joint venture (JV) with TotalEnergies has been completed. “As part of the JV, TotalEnergies invested $300 million in AGEL subsidiary, for acquiring 50 per cent stake in the projects.” This follows the binding agreement about the JV announced between AGEL and TotalEnergies in September 2023.
The JV houses the 1,050 MW portfolio comprising a mix of already operational (300 MW), under-construction (500 MW) and under-development assets (250 MW) with a blend of both solar and wind power projects in India.
“With this transaction, TotalEnergies has reinforced its strategic alliance with AGEL and support in enabling AGEL’s target of 45 GW capacity by 2030,” it said. AGEL develops, owns, and operates utility-scale grid-connected solar, wind, and hybrid renewable power plants and has an operating renewable portfolio of 8.4 gigawatts (GW).
On December 26, AGEL announced that its board has approved the promoter’s plan to infuse Rs 9,350 crore into the company by investing in warrants of the company. This, together with a debt worth $1.4 billion raised earlier this month, takes the total funds raised by the company to $3 billion.
How will the Adani-Total Energies Partnership help India?
Total Energies provide a global exposure for Adani Green Energy Limited. Such a global exposure would help the company to compete with the likes of strong players in this field. However, Adani gives access to Total Energies in India; which will be the biggest consumer of Green Energies. Possibly, the world wide hub and distributor of energies.
One thing common in both of these cases is that it will benefit India. Adani’s strength will glorify India’s strong command in this sector and behemoth success of Total Energies will provide more and more FDI in the country.
It only helps India to contribute more to the Green Energy Initiatives and cut on the non-renewable resources. The country’s mission to enable GigaWatts and MegaWatts of Green Energy facilities just like Adani’s 45 GW Project.
A country with more than 1.3 Billion people living in it will require a lot of time to transition from Non-Renewable Sources to Green Energies. Such partnerships and deals help the country to complete the transition much quicker than anticipated.