Adani Green Energy Ltd (AGEL) on Thursday announced that it has entered into a joint venture with TotalEnergies, pursuant to which the company and TotalEnergies own a 50:50 stake in Adani Renewable Energy Sixty Four Limited (ARE64L). ARE64L houses a 1,150 MWac project portfolio, being a mix of operational and under execution solar assets, with a blend of both, merchant based and SECI PPA projects housed under Adani Renewable Energy Fifty Six Limited.
As part of the transaction, TotalEnergies has acquired a 50 per cent stake in ARE64L,for an amount of $444 million. “With this investment, ARE64L has now become 50-50 owned by Adani Green Energy and TotalEnergies,” the company said in a regulatory filing.
Further, upon the under-development projects achieving commercial operations, TotalEnergies will also invest an additional amount to be determined based on book value subject to certain parameters around the project cost and timelines. This additional funding by TotalEnergies will be over and above the initial investment of approx. $444 million, it said.
Under the terms of the joint venture, AGEL will have overall responsibility for day-to-day operation and management of ARE64L and Adani Renewable Energy Fifty Six Limited. It shall also have overall responsibility with respect to the construction and development of the under development assets and their implementation.
In terms of board composition, there will be a 50:50 governance setup between the company and TotalEnergies. The Board of ARE64L will comprise equal members of both the parties with the chairman being a nominee of AGEL. Further, the Board of ARE64L will be responsible for supervising and strategizing for ARE64L and its subsidiaries, as well as overseeing internal controls for ARE64L.
In a statement, AGEL said that the initial investment of $444 million by TotalEnergies will help the company in monetization of its assets while retaining the control and also unlocking capital for future growth of the company. “The transaction also reinforces the strategic alliance between the company and TotalEnergies and will support the company in becoming the Indian leader of renewable energy, with a target of 50 GW renewable power capacity by 2030,” it added.