LONDON – French energy giant Total SE said it would pay $ 2.5 billion for a 20% stake in the world’s largest solar power developer, the latest step by an oil company to expand into renewable energy.
Total said on Monday that the investment in Adani Green Energy Ltd. would help it meet its goals of generating more energy from low-carbon sources amid an ongoing global transition from fossil fuels – a shift that some analysts say is accelerated by the pandemic.
The company, along with other oil companies, including BP PLC and Royal Dutch Shell PLC, has committed to increase spending on renewable energy, such as wind and solar energy, to reduce CO2 emissions. 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 deal with Adani gives Total exposure to a leading renewable energy company in India, one of the world’s fastest growing markets for energy demand. Adani has 54 wind and solar energy projects across the country, including one of the world’s largest solar energy projects in Kamuthi, South India. Based on existing generation capacity and projects in the pipeline, Adani is the world’s largest solar power developer, Total said.
As part of the deal, Total will also take a 50% stake in a portfolio of Adani’s solar energy resources and take a seat on the company’s board. The move will help Total achieve its goal of having 35 gigawatts of renewable energy capacity by 2025, up from about 7 gigawatts last year.