A transaction between one of India’s largest renewable energy companies and French energy major Total has received regulatory go-ahead from the Indian government.
According to media reports, the Competition Commission of India approved a transaction between Adani Green Energy and a subsidiary of Total to transfer 2.1 gigawatts of solar and wind energy assets to a joint venture company. Adani Green Energy and Total’s subsidiary each have 50% holding in the joint venture.
The size of the transaction is significant if one considers Total’s global renewable energy assets. The French company has 7 gigawatts of power generation assets around the world, including over 3 gigawatts of renewable energy assets.
Adani Green Energy will transfer over 2 gigawatts of operational solar and wind energy assets spread across 11 Indian states. All of these projects have long-term power purchase agreements with power distribution utilities at fixed rates. Adani also has 475 megawatts of solar, 1.5 gigawatts of wind and 0.9 gigawatts of solar-wind hybrid capacity under construction.
Adani Green Energy also secured rights to develop 8 gigawatts of solar power capacity in a tender that will also require the company to set up 2 gigawatts of additional solar cells and modules manufacturing capacity. The transaction with Total and the large tender win has resulted in a meteoric rise in share prices of Adani Green Energy. The company was listed at Indian bourses in June 2018 at around US$0.40 per share. On 19 October 2020, its shares closed at US$9.57 a piece.
Strong backing from its parent group, aggressive participation in new tenders and, most importantly, the Total deal has help Adani Green Energy emerge as a rare gem for retail investors in the Indian market. Many of its competitors, like Acme Cleantech Solutions and ReNew Power have been unsuccessful with their plans to raise funds through retail equity markets.