Decoding the Adani-Total solar deal


Partnership with French major Total will boost Adani’s balance sheet and provide the confidence to carry out its contracted pipeline which remains strong with around 500 MW of solar PV under construction in India and about 200 MW operational and in pipeline in Australia, according to Wood Mackenzie analysts.

The investment comes at a time when access to capital has become difficult for renewable independent power producers (IPPs) amid issues like payment delays from utilities and power purchase agreement renegotiation.

Decoding the Adani-Total deal, Woodmac analyst Rishab Shrestha said: “In India, payment delays from utilities to renewable IPPs and renegotiation of tariffs have worsened and made access to capital difficult. Domestic capital now comes at a premium. Adani sells more than 500 MW of solar power to TANGEDCO [Tamil Nadu Generation and Distribution Corporation Limited]. The utility has had a history of delay and discounted payments and poses a risk.

“However, the government is implementing measures to reduce payment delays and curtailment issues. Adani and Total partnership boost their balance sheet and provide confidence in the execution of the contracted pipeline.”

The deal could also mean Total’s entry into India’s commercial & industrial rooftop solar segment.

“Within Asia, Total Solar’s activities in rooftop solar have thus far been concentrated in South East Asia. As Total scales up its activities in India’s solar sector, C&I rooftop could also be a growth opportunity,” said Shrestha.

The deal

As part of the deal, Total will buy half the stake in Adani Green Energy Limited’s 2,148 MWac solar portfolio for US$ 510 million to support their future plans. Total and AGEL will create a 50/50 joint venture into which AGEL will transfer its solar assets in operation.

Speaking about the French major’s strategy, Wood Mackenzie’s principal analyst-Energy Transition Practice Tom Heggarty said: “Total has been extremely active in the power and renewables M&A market as it seeks to diversify its activities and grow its exposure to the zero-carbon power sector.

“The Adani investment is the sixth it and its subsidiary companies have made in renewable power businesses so far, beginning with the acquisition of a majority stake in SunPower in 2011. Since then, it has acquired operational and development solar PV and wind assets across a wide range of countries from France, to Australia, Brazil, and Egypt.”

Total already had a presence in the Indian solar PV market prior to the Adani deal through Total Eren’s Eden Renewables joint venture with EDF Renewables, which has over 200 MW under the ownership and recently signed PPAs for a further 700 MW of assets.

With this partnership, Total’s solar footprint jumps by around 1 GW through 50% acquisition of 2.1 GW of Adani’s current operational portfolio in India.

This investment follows a series of positive investment trends in capital deployment by investors such as Abu Dhabi Investment Authority, GIC, Goldman, Canada Pension Plan Investment Board, Masdar, Temasek and EQT in established and new renewable development platforms.



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