Total speeds up renewables push with $2.5 bln investment in Indian solar power
Total is paying $2.5 billion for a share in Indian renewable energy firm Adani Green Energy Limited (AGEL) and a portfolio of solar power assets, marking the latest step in the French energy company's drive to reduce its dependence on oil.
For its investment, Total will get a 20% stake in AGEL and a seat on its board, as well as a 50% share in the Indian firm's portfolio of solar power assets, the French firm said.
AGEL is controlled by Indian conglomerate Adani Group and has a market capitalisation of about 1.483 trillion Indian rupees ($20.25 billion).
Total has embarked on a strategy of shifting towards electricity and renewable energy. It aims to have 35 gigawatts (GW) of gross renewable energy generation capacity by 2025 from around 9 GW now.
Growing investor pressure has spurred Europe's top energy companies to outline plans to curb emissions and boost renewable energy output.
Last week, Total became the first major global energy company to quit the main US oil and gas lobby, the American Petroleum Institute, citing disagreements over the lobby's climate policies and support for easing drilling regulations.
Commenting on Total's acquisition, CEO Patrick Pouyanne said: "Our entry into AGEL is a major milestone in our strategy in the renewable energy business in India put in place by both parties."
"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," he added.
Total's shares dipped 0.7% in early trading, as oil prices fell, but investment bank Barclays said Total was one of its top picks, with an "overweight" rating.
AGEL is targeting 25 GW of renewable power generation by 2025, and Total said AGEL would form a key part of Total's own overall plans for 35 GW of gross production capacity from renewable sources by 2025, along with plans for a further 10 GW per year on top of that afterwards.
Total and Adani struck a partnership deal back in 2018 in the liquefied natural gas (LNG) sector.
($1 = 73.2320 Indian rupees) (Reporting by Sudip Kar-Gupta and Christian Lowe. Editing by Mark Potter)
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