LONDON – French energy giant Total SE has said it will pay $ 2.5 billion for a 20% stake in the world’s largest solar developer, the latest move by an oil giant to expand into renewable energy.
Total said Monday the investment in Adani Green Energy Ltd. will help him reach his targets of generating more power from low-carbon sources amid a continuous global transition away from fossil fuels – a shift accelerated by the pandemic, according to analysts.
The company, along with other oil chiefs, including BP PLC and Royal Dutch Shell PLC, has promised to increase spending on renewable energy such as wind and solar power in an effort to reduce carbon emissions. Total plans to spend $ 3 billion a year on renewable energy by 2030, about 20% of the annual investment budget and against $ 2 billion last year.
The Adani agreement provides total exposure to a leading renewable enterprise in India, one of the world’s fastest growing energy demand markets. Adani has 54 wind and solar power projects across the country, including one of the largest solar power projects in the world in Kamuthi, South India. Based on the existing generation capacity and the projects envisaged, Adani is the world’s largest developer of solar power, Total said.
As part of the agreement, Total also takes a 50% stake in a portfolio of Adani’s solar assets and acquires a seat in the management of the company. The move will help Total achieve its goal of having 35 gigawatts of renewable power by 2025, compared to about 7 gigawatts last year.