TotalEnergies invests USD 300 million in joint venture with Adani Green Energy

New Delhi: French energy giant TotalEnergies has invested USD 300 million (about Rs 2,500 crore) in a renewable energy joint venture with Adani Green Energy Ltd as it continues to repose faith in the conglomerate run by billionaire Gautam Adani.

The Adani group firm and the French giant will own 50:50 stake in the company which in turn will house a 1,050 MW project portfolio.

"TotalEnergies has acquired a 50 per cent stake in Adani Renewable Energy Nine Ltd (ARE9L) for an amount of USD 300 million," Adani Green Energy Ltd (AGEL) said in a stock exchange filing.

ARE9L is a subsidiary of AGEL.

The 1,050 MW project portfolio includes 300 megawatts (MW) of operational capacity, 500 MW of under-construction solar projects and 250 MW of under-development projects.

TotalEnergies, which holds about 19.75 per cent stake in AGEL, had previously invested in Adani Green Energy Twenty Three Ltd, another subsidiary of AGEL.

"As per the valuation report dated November 27, 2023 obtained from Mazars Advisory LLP, an independent valuer, the aggregate valuation of the project portfolio companies is equivalent to USD 489 million," AGEL said in a notice to shareholders seeking approval for the TotalEnergies deal.

"As part of the transaction, TotalEnergies will acquire a 50 per cent stake in ARE9L, which will house this Project portfolio companies, for an amount of USD 300 million which are terms more beneficial to the company (AGEL)." Upon the under-construction and under-development projects achieving commercial operations, TotalEnergies will also invest an additional amount to be determined based on actual project cost subject to certain parameters around the project cost and timelines.

"Such further funding by TotalEnergies will be over and above the initial investment of USD 300 million and will be subject to suitable approvals as may be required," it added.

The French firm infused an amount of Rs 4,013 crore into AGE23L by subscribing to compulsorily convertible debentures issued by AGE23L, which have been used to redeem the existing non-convertible debentures held by TotalEnergies.

"The (Wednesday's) transaction also reinforces the strategic alliance between the company (AGEL) and TotalEnergies and will support the company in becoming the Indian leader of renewable energy, with a target of 45 GW renewable power capacity by 2030," the notice said.

Later in a statement, AGEL said the 1,050 MW joint venture (JV) with TotalEnergies has been completed. "As part of the JV, TotalEnergies invested USD 300 million in AGEL subsidiary, for acquiring 50 per cent stake in the projects." This follows the binding agreement about the JV announced between AGEL and TotalEnergies in September 2023.

The JV houses the 1,050 MW portfolio comprising a mix of already operational (300 MW), under-construction (500 MW) and under-development assets (250 MW) with a blend of both solar and wind power projects in India.

"With this transaction, TotalEnergies has reinforced its strategic alliance with AGEL and support in enabling AGEL's target of 45 GW capacity by 2030," it said.

AGEL develops, owns, and operates utility-scale grid-connected solar, wind, and hybrid renewable power plants and has an operating renewable portfolio of 8.4 gigawatts (GW).

On December 26, AGEL announced that its board has approved the promoter's plan to infuse Rs 9,350 crore into the company by investing in warrants of the company. This, together with a debt worth USD 1.4 billion raised earlier this month, takes the total funds raised by the company to USD 3 billion.