TotalEnergies Invests $300 Million in Adani Green Energy’s Clean Energy Projects

French energy giant TotalEnergies SE has demonstrated its commitment to sustainable energy by injecting $300 million into Adani Green Energy Ltd’s (AGEL) clean energy projects. This significant investment elevates the total investments from global backers in India’s largest renewable power producer to an impressive $1.63 billion, underlining the growing interest in renewable energy initiatives in India.

TotalEnergies recently unveiled its intention to acquire a 50 percent stake in a new joint venture with AGEL, with AGEL retaining the remaining share. This joint venture is poised to manage a robust portfolio of 1,050 MW, comprising 300 MW of operational capacity, 500 MW under construction, and 250 MW under development, encompassing both solar and wind power projects.

It’s worth noting that TotalEnergies already possesses a 19.7 percent stake in AGEL and operates a joint venture named AGE23L, which oversees a portfolio of 2,353 MW.

This substantial $300 million investment by TotalEnergies marks a significant development, particularly in light of the Hindenburg report from January, which raised concerns about the Adani Group’s debt and alleged accounting irregularities—allegations that Adani vehemently denies. Despite these concerns, AGEL has managed to attract a range of investors, including strategic investor TotalEnergies, GQG Capital Partners, and the Qatar Investment Authority (QIA). Collectively, these investors have poured $1.63 billion, or nearly Rs 14,000 crore, into AGEL, capitalizing on favorable valuations following the short-seller report.

The rationale behind these investments lies in India’s leadership in the renewable energy sector, boasting numerous solar and wind projects in the pipeline. AGEL, as India’s largest renewable power producer, is well-positioned to benefit from the country’s strong execution capabilities and impressive track record.

AGEL has emerged as a major player in India’s solar power landscape, offering some of the world’s most cost-effective renewable energy solutions, with an average portfolio tariff as low as Rs 3.02 per unit compared to the country’s average procurement price of Rs 3.75 per unit.

With an extensive portfolio of 20.4 GW across operational, under-construction, awarded, and acquired assets, AGEL has set ambitious capex guidance of Rs 14,000 crore for the current year, targeting approximately 3 GW of projects. In the following year, the company aims to reach at least 5 GW, translating to an additional investment of Rs 23,000-24,000 crore.

AGEL’s ability to produce low-cost power is attributed to its comprehensive execution process and tech-enabled operations and maintenance practices. The company has a strong record of delivering projects ahead of schedule, even though regulations allow up to 18 months from the effective scheduling of the power purchase agreement (PPA) to commissioning.

With a capacity target of 45 GW, AGEL is poised for sixfold growth between FY23 and FY30. Ongoing technological advancements suggest that the company may even surpass these expectations, solidifying its position as a key player in India’s renewable energy revolution.

Liked this story and want to continue receiving interesting content? Watchlist Niveshaay’s smallcases to receive exclusive and curated stories!

You can check out Niveshaay’s ‘Green Energy’ smallcase that is carefully curated to align with the theme of Renewable Energy.

Disclaimer: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. The content in these posts/articles is for informational and educational purposes only and should not be construed as professional financial advice and nor to be construed as an offer to buy /sell or the solicitation of an offer to buy / sell any security or financial products.
Users must make their own investment decisions based on their specific investment objective and financial position and using such independent advisors as they believe necessary. For more information and disclosures, visit our disclosures page here