Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
French oil and gas major TotalEnergies has struck a new deal with a green energy division of Indian billionaire Gautam Adani’s conglomerate and will invest $444mn in a joint portfolio of solar power projects.
Total is one of the non-Indian companies that has visibly pursued collaborations with the Adani Group since the conglomerate faced corporate fraud allegations last year from US short seller Hindenburg Research. The Indian group has vigorously denied the claims.
Total said on Tuesday it was forging a new joint venture with Adani Green Energy Limited, an Adani subsidiary in which it already has a 19.75 per cent stake. The two sides will hold 50 per cent each of a 1.15 gigawatt portfolio of solar parks in the Gujarat region, enough to power a small city. AGEL will contribute assets and Total will provide funding for the JV’s development.
“This will strengthen TotalEnergies’ strategic alliance with AGEL, allowing it to support the company in becoming a global renewable leader as it targets 50GW of renewable power capacity by 2030,” the French company said.
The deal follows a separate $300mn investment by Total in another solar and wind venture with AGEL in September 2023, several months after the French group initially paused on deals with the Indian group when the allegations came to light.
Total’s chief executive Patrick Pouyanné at first put a huge $4bn investment in a green hydrogen project with Adani on hold in February 2023 and said he was awaiting clarity on the Indian group’s situation.
While the future of that venture is still uncertain, Total has since gone ahead with other tie-ups and maintained existing ones including a gas investment, pointing to the increase in the ventures’ value despite the sell-off in Adani shares and those of its listed divisions.
Adani did not respond to a request for comment on whether it ever completed a general audit promised shortly after the Hindenburg report.
Total is seeking to diversify and invest oil proceeds into renewable energy assets. AGEL’s solar developments in Khavda, Gujarat, will have a 30GW capacity eventually, or enough to power 16mn households in India, Total and Adani said.
India, the most populous country in the world with some of the fastest-growing energy demand, has set an ambitious target to hit 500GW of renewable energy capacity by 2030. Adani sees itself as one of the biggest players in helping India meet that goal, though analysts say the rollout will have to speed up for it to succeed.
The sell-off in the group’s listed companies following Hindenburg’s report, which accused Adani of engaging in fraud and market manipulation, wiped about $140bn off the market value of the group and listed units.
These shares have largely recovered, and Adani has been pursuing efforts to diversify since the scandal. It has invested in new sectors such as data centres and media, aside from its core infrastructure interests including ports and cement.
In August this year, Adani Group’s power transmission and distribution arm raised $1bn in an equity sale, the first since the conglomerate canned a share placement after being hit by the fraud allegations.
Read the full article here
