Adani Green Energy (AGEL) stated on Monday that French power giant Total SA will obtain 20% minority interest in the firm from Adani Group. The deal, valued at about $2 billion, will also provide Total a seat on the board of directors of AGEL.
The transaction follows Total investing $510 million in April 2020 for the acquisition of 50% stake in AGEL’s 2,353 megawatt (MW) operational solar projects in the nation. The acquisition is component of Total’s target of constructing a portfolio of 35,000 MW of renewable power capacity globally by 2025.
Currently, AGEL’s operational renewable power portfolio stands at 3,000 MW, with an equal capacity below building.
“We are delighted to deepen our strategic alliance with Total, a global energy major, and welcome them as a significant shareholder in AGEL,” Gautam Adani, chairman of the Adani Group stated. “We have a shared vision of developing renewable power at affordable prices to enable a sustainable energy transformation in India,” Adani added.
The typical price at which AGEL sells energy is Rs 3.26/unit. Though it is greater than the record low prices of Rs 2/unit found in current solar auctions, the tariff is reduce than the typical energy buy price of Rs 3.6/unit to discoms across the nation.
Apart from the aforementioned operational and below-building renewable power capacities, AGEL has 8,600 MW of projects in the pipeline, like the 8,000 MW solar plants to be constructed below the manufacturing-linked solar scheme.
As component of the scheme, Adani will provide energy at Rs 2.92/unit to central government agency Solar Energy Corporation of India (Seci) and construct 2,000 MW of solar manufacturing capacities. However, with reduce tariffs found in current auctions, Seci has been struggling to come across purchasers for electrical energy to be generated from this upcoming project.
Total has partnered with Adani to raise its presence in the nation on other power fronts as properly. In October 2019, the two corporations had formed a 50:50 venture to jointly personal and operate numerous assets across the gas worth chain, like imports and regasification liquefied organic gas (LNG) terminals.
Total has taken more than 37.4% stake in Adani Gas and 50% stake in Adani’s Dhamra LNG project in Odisha. The two corporations also strategy to establish a joint venture to marketplace LNG in India and Bangladesh and set up a retail network of 1,500 fuel service stations more than the period of 10 years. “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,” Patrick Pouyanné, chairman and CEO of Total, stated.