Joint venture to develop 1,150 MW solar projects, advancing India’s renewable power capacity and climate goals.
The French firm TotalEnergies plans to expand its renewable portfolio in India by committing $444M to a new JV with Adani Green Energy Ltd. This investment will form a 50:50 joint venture between Adani Green and Adani Renewable Energy Sixty-Four Limited (ARE64L), and TotalEnergies Renewables Singapore Pte for developing the solar energy sector in India. At present, Totalenergies holds approximately 19.75% shareholding in Adani Green through its affiliate entities. This is TotalEnergies’ latest investment coming after the earlier collaboration between the two during September 2023 when TotalEnergies offered partners $300 million for the construction of a 1,050 MW green portfolio.
Adani Green released a statement stating that the board of the company has approved the execution of binding documents for the formation of this new JV, to be established for the implementation of the solar energy projects comprising a portfolio of 1,150 MW containing the existing projects under construction. This portfolio will comprise a mix of merchant-based projects that are functioning in the wholesale market and projects owned through power purchase agreements, mainly with SECI. These agreements enable the JV to benefit from the current liberalization measures that India has placed in the power market. Also, it will strengthen the partnership between Adani Green and TotalEnergies, positioning them to accelerate renewable energy deployment in India.
The projects will be developing the world’s biggest renewable energy station in Khavda, Gujarat. The total area allocated for the Khavda site is 538 sq km. It is 5 times bigger than the capital city of France, Paris, which will make Khavda one of the biggest renewable energy parks in the world. Currently, AGEL has replicated 2 GW of generation capacity at this location, and once fully scalable, this region is expected to host a cumulative generation capacity of 30 GW of solar and wind energy to power 16 million homes in India. The electricity will be sold on the wholesale market and through power purchase agreements inked with the federal government agency, Solar Energy Corporation of India. According to a statement from TotalEnergies, this will enable the company to profit from the liberalisation of the Indian power market.
Market Impact:
The announcement has been well received in the market with Adani Green’s stock price rising to ₹ 1,945.20, up 5.69 % on BSE last Monday. This upsurge is due to the growing confidence of the investors in the range of projects that AGEL has in its kitty and TotalEnergies’ deepening interest in the green energy market in India.
While the deal was put on hold last year owing to the Hindenburg row that wiped almost $150 bn in share value of the Adani group, Patrick Pouyanne, CEO of TotalEnergies, has defended his company’s investments with Adani claiming they were still worth more following the share price decline than when Total initially got in.
Prominently, the merchant-based as well as PPA-based projects will help the JV to have different revenue streams, which are beneficial for long-term profitability. This partnership between Adani Green and TotalEnergies will also help in faster commissioning of the solar projects as India looks to achieve its renewable power capacity targets and meet its parity on the climate change agenda.
This latest investment in India is indeed in line with the direction of TotalEnergies, which is actively seeking growth opportunities and opportunities for the renewal of energy worldwide. Through this investment, India has further proved its position as a “new star” of the renewable energy market globally.
