LONDON – French energy giant Total SE said it would pay $ 2.5 billion for a 20% stake in the world’s largest developer of solar energy, the latest move by a major oil company to expand into renewable energy.
Total said on Monday that investing in Adani Green Energy Ltd. would help meet its goals of generating more energy from low carbon sources amid a continuous global transition away from fossil fuels – a change that some analysts say it is being accelerated by the pandemic.
The company, along with other major oil companies, including BP PLC and Royal Dutch Shell PLC, has pledged to increase spending on renewable energy, such as wind and solar, in an effort to reduce carbon emissions. Total plans to spend $ 3 billion a year on renewable energy by 2030, about 20% of its annual investment budget and more than $ 2 billion last year.
Adani’s business gives Total exposure to a leading renewable energy business in India, one of the fastest growing markets in the world for energy demand. Adani has 54 wind and solar projects in operation across the country, including one of the largest solar projects in the world in Kamuthi, southern India. Based on existing generation capacity and projects in its pipeline, Adani is the world’s largest developer of solar energy, Total said.
As part of the deal, Total will also take a 50% stake in Adani’s portfolio of solar assets and will have 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.