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Total to acquire 25% in Adani arm

Partnership to set up world’s largest green hydrogen and associated infra at an investment of $50 billion over next ten years

Adani Enterprises and TotalEnergies of France on Tuesday entered into a partnership to set up the world’s largest green hydrogen and associated infrastructure at an investment of $50 billion over the next ten years. The development sharpens competition with Mukesh Ambani’s Reliance Industries, which also has big plans around green hydrogen.

As part of the alliance, TotalEnergies will acquire 25% stake in Adani New Industries (ANIL) from Adani Enterprises, and provide their technological and financial expertise to the partnership. The value of the deal was not disclosed by the two entities.

The announcement saw Adani Enterprises shares closing up 5.53% at `2,196.50 on the Bombay Stock Exchange.
This is the fourth deal struck between the two entities in a span of last three years. In 2019, Total had bought a 37.4% stake in Adani Gas – now Adani Total Gas – and last year, it spent $2.5 billion acquiring 20% of Adani Green Energy, and a 50% stake in a portfolio of solar assets.

TotalEnergies understanding of the global and European markets, along with its credit enhancement and financial strengths, will help the Adani firm secure low cost financing. Adanis, on the other hand will provide their rapid execution, operational and capital management strengths to the partnership.
The aim is to produce 1 million tonne per annum of green hydrogen before 2030 at lowest cost to the consumers.

Adani New Industries, the partnership firm, aims to be the largest fully integrated green hydrogen player in the world, with presence across the entire value chain, from the manufacturing of renewables and green hydrogen equipment (solar panels, wind turbines, electrolysers, etc), to large scale generation of green hydrogen, to downstream facilities producing green hydrogen derivatives.

Adani had, in November last year, stated that his group will invest $70 billion in the new energy space of the next decade. This included Adani Green Energy (AGEL), the world’s largest solar power developer, investing $20 billion to develop a 2 GW per year solar module manufacturing capacity by 2022-23.

Hydrogen is a clean fuel that, when consumed in a fuel cell, produces only water. Hydrogen can be produced from a variety of resources, such as natural gas, nuclear power, biomass, and renewable power like solar and wind. It can be used as transportation fuel for cars, as well as for producing portable power.

Gautam Adani, chairman of Adani Group said, the partnership has a great strategic value to the business and the ambition to become the world’s largest green hydrogen player. It will also allow the partners to shape the market demand through research and development, market reach and an understanding of the end consumer.

“This is why I find the continued extension of our partnership to hold such great value. Our confidence in our ability to produce the world’s least expensive electron is what will drive our ability to produce the world’s least expensive green hydrogen. This partnership will open up a number of exciting downstream pathways,” Adani said.

Patrick Pouyanné, chairman and CEO of TotalEnergies said the partnership is a major milestone in implementing the renewable and low carbon hydrogen strategy. The company plans to not only decarbonise the hydrogen used in their European refineries by 2030, but also start the mass production of green hydrogen to meet the demand, as the market will take off by the end of this decade.

“…This future production capacity of 1 million tonne per annum of green hydrogen will be a major step in increasing TotalEnergies’ share of new decarbonised molecules including biofuels, biogas, hydrogen, and e-fuels to 25% of its energy production and sales by 2050.”

“The partnership helps India in its quest to build the fundamental pillars of economic sustainability by driving decarbonisation of industry, power generation, mobility, and agriculture thereby mitigating climate change, and ensuring energy independence,” an Adani Enterprises statement said.

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