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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 major to expand into renewable energies.
Total said on Monday that the investment in Adani Green Energy Ltd. would help it meet its targets of generating electricity from low-carbon sources amid an ongoing global transition away from fossil fuels – a change accelerated by the pandemic according to some analysts.
The company, along with other oil majors, including BP PLC and Royal Dutch Shell PLC, has pledged to increase spending on renewable energy like wind and solar power in an effort to reduce carbon emissions. Total plans to spend $ 3 billion a year on renewable energy by 2030, around 20% of its annual investment budget, up from $ 2 billion last year.
The Adani deal gives Total exposure to a leading renewable energy business in India, one of the world’s fastest growing markets 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, in 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 this agreement, Total also takes a 50% stake in a portfolio of solar assets from Adani and obtains a seat on the company’s board of directors. The move will help Total meet its goal of having 35 gigawatts of renewable energy capacity by 2025, up from around 7 gigawatts last year.
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