Are you a keen observer or investor in the market? If yes, you must have noticed a consistent and systematic increase in value in one particular group of stocks – the Adani stocks. Despite facing market manipulation allegations by Hindenburg Research, the Adani group has been slowly and steadily trying to regain lost ground. Of this group, Adani Green is making headlines again.
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Adani Green Energy Limited (AGEL) has successfully completed an important 1,050 MW equally owned joint venture with TotalEnergies, marking a significant achievement in the renewable energy sector. Continue reading for a detailed insight into this joint venture and its critical impact on the evolution of renewable energy.
About Adani Green Energy
Adani Green Energy is a leader in India’s renewable energy industry and the biggest provider of green energy solutions in the country. AGEL plays a key role in India’s move towards cleaner energy. They run a variety of large solar, wind, and hybrid renewable energy plants, covering 12 states with an impressive capacity of 8.4 GW.
AGEL has made a significant impact in cutting down carbon emissions, offsetting over 41 million tonnes so far. This shows their strong commitment to helping India reduce its carbon footprint. Their ambitious target is to attain 45 GW of renewable energy capacity by 2030. This aligns with India’s national energy plans, showing AGEL’s dedication to sustainable growth.
Background of TotalEnergies
TotalEnergies, a global energy powerhouse, has been a key player in India’s energy sector since 1993. Headquartered in Paris, France, this multi-energy company has grown from traditional oil and gas to a more diverse energy portfolio. It’s involved in everything from drilling and petrochemical production to renewable energy and green gases.
In India, the company has ventured into various sectors, such as LPG, lubricants, and special fluids, through its subsidiaries. Notably, it has also ventured into renewable energy and energy storage, aligning with India’s shift towards a more sustainable energy future.
TotalEnergies’ commitment to innovation in India is evident. They’ve set up a Technical Center in Mumbai and a Digital Innovation Center in Pune, showcasing their dedication to developing cutting-edge solutions.
Their plan also places a lot of emphasis on low-carbon and renewable hydrogen, with the goal of decarbonising the hydrogen used in refineries in Europe by 2030. This action demonstrates TotalEnergies’ flexibility in an evolving energy environment as well as its dedication to a more sustainable future.
Inside the joint venture
The partnership between TotalEnergies and Adani Green Energy has grown significantly over the years. Starting in 2018, TotalEnergies joined hands with the Adani Group, investing in Adani Total Gas Limited. This marked their first big step into the energy sector together, focusing on Liquified Natural Gas (LNG).
After Adani Total Gas news, by 2020, their collaboration deepened. TotalEnergies bought a 20% share in AGEL, then the world’s largest solar developer, and also invested in half of a 2.35 GW portfolio of AGEL’s solar projects. This was a major move, showing their strong commitment to renewable energy.
In 2022, TotalEnergies was set to buy a 25% stake in Adani New Industries Limited (ANIL) for producing and commercialising green hydrogen in India. By 2030, ANIL intends to produce one million metric tonnes of green hydrogen per year with the help of 30 GW of renewable energy sources. The initiative includes a USD 5 billion project for green hydrogen-derived urea production, reducing India’s urea imports.
However, the Hindenburg report’s release has caused a delay in the plan. The future of the green hydrogen venture is now unclear.
TotalEnergies’ stakes in the Adani group as of February 2023:
Adding to the list, the latest development in this partnership is the joint venture formed on December 27 2023. TotalEnergies acquired USD 300 million in an Adani Green Energy subsidiary for a 50% stake in a portfolio that includes solar and wind projects across India.
This portfolio totals 1,050 MW, with 250 MW already operational, 500 MW under construction, and 250 MW in the planning stages. This investment is a big step towards AGEL’s goal of achieving a 45 GW capacity by 2030 and strengthens the bond between the two companies, highlighting their joint efforts in promoting sustainable energy.
AGEL is set to raise INR 9,350 crore through the issuance of preferential warrants to its promoters. This move is part of AGEL’s 2030 target. The company plans to use this investment for two primary purposes: reducing debt and accelerating capital expenditure, which is important for expanding its renewable energy projects.
AGEL recently disclosed in a stock exchange filing that the preferential issuance of 63.14 million warrants to promoter businesses Ardour Investment Holding Ltd and Adani Properties Pvt. Ltd. had been approved by the board of AGEL. These warrants, which are valued at ₹1,480.75 apiece, will, after conversion, represent 3.833% of the capital of Adani Green Energy shares.
Additionally, Adani Green Energy and Solar Energy Corporation of India have finalised a power purchase deal for the delivery of 1,799 MW of solar energy. This contract was obtained by Adani Green as a part of an 8,000 MW manufacturing-linked solar tender in 2020. This major development represents a significant milestone in AGEL’s efforts to increase its capacity for solar power generation and strengthen its position in India’s renewable energy industry.
Adani Group is committed to bouncing back from Hindenburg Research’s allegations. While the impact of these allegations cannot be ignored, Adani Group is actively working towards regaining investor confidence. The joint venture between Adani Green Energy and TotalEnergies, after the allegations, is a significant step in this direction.
Also, AGEL’s 2030 target, connected with TotalEnergies’ global expertise and commitment to decarbonization, positions this joint venture as a powerful force in the fight against climate change.