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 a large oil company to expand renewable energy.
Total said Monday that investing in Adani Green Energy Ltd. will help it meet its goals of generating more energy from low-carbon sources amid a continuous global transition from fossil fuels – a change I say analysts is accelerated by the pandemic.
The company, along with other major oil companies, including BP PLC and Royal Dutch Shell PLC, is committed to increasing spending on renewable energy, such as wind and solar, in an effort to reduce carbon emissions. The total plans to spend $ 3 billion a year on renewables by 2030, about 20% of its annual investment budget and up from $ 2 billion last year.
The Adani agreement provides full exposure to a leading renewable energy business in India, one of the fastest growing energy demand markets in the world. Adani has 54 solar and wind projects in operation across the country, including one of the largest solar projects in the world in Kamuthi, southern India. Based on existing production capacity and projects in its pipeline, Adani is the world’s largest developer of solar energy, Total said.
As part of the transaction, Total also takes a 50% stake in a portfolio of Adani solar assets and obtains a seat on the company’s board of directors. This move will help Total reach its goal of having a renewable energy capacity of 35 gigawatts by 2025, up from about 7 gigawatts last year.