This could be a big blow for the new venture’s timelines of production of green hydrogen at $1 per kg by 2030.
Last week, Total said it would not immediately proceed with its latest venture that involved taking a 25% stake in Adani New Industries Ltd (ANIL), a subsidiary of Adani Enterprises, as part of an ambitious hydrogen co-development with Adani Enterprises.
In June last year, ANIL and TotalEnergies had outlined a capex plan of $50 billion to set up a 2.5 million metric tonnes per annum (mmtpa) of green H2 manufacturing capacity over the next 10 years, with the first phase of 1.0 mmtpa expected to be commissioned before 2030.
What was not publicly disclosed was that, as per the deal terms, Total had made a total of $10-billion capital commitment to the hydrogen venture, standing as guarantor to 50% of the project’s debt, translating to $6 billion, people cited above said.
The deal is yet to close.
Detailed questionnaire sent to TotalEnergies and Adani group on February 9 did not elicit any response till press time Sunday.“This project was announced but nothing has been signed…and for now it won’t be signed,” TotalEnergies chief executive Patrick Pouyanné had told reporters on Wednesday. “It makes no sense to add more (projects) until there is clarity.”
Total has just over $3 billion of investments with Adani, including in gas distribution and solar projects, which it has played down as a small 2.4% slice of its total capital commitments.
“Adani has other things to deal with now, it’s just good sense to pause things while the audit goes forward,” Pouyanne said.
He said TotalEnergies is “not in charge” of the financial health of Adani group, with whom it has a number of joint ventures.
“The 50% guarantee element was a big benefit for Adani to raise funds as Total enjoys a far superior credit rating,” said an official in the know. “The economics of the arrangement had been agreed upon. Hopefully, this review will end soon and not get abandoned so that project can kickstart.”
Securities Ltd in a detailed report on Adani group in July last year had said the AA rating of TotalEnergies was expected to help ANIL raise low-cost initial funding from the global market, saving 150-200 basis points (bps) in interest costs.
TotalEnergies is an active member of several H2-dedicated initiatives and professional associations in Europe. The company is also an anchor sponsor of the €1.5-billion clean H2 infrastructure fund, which creates the blue H2 ecosystem in Europe.
“ANIL is targeting the European market for the exports of its green H2, which will generate high margin forex income. The strategic associations of TotalEnergies in Europe could help ANIL in getting access to export its green H2 in the European market,” the Ventura report said.
TOTAL SUPPORT
Adani can ill afford to lose TotalEnergies’ support, industry players said. Though profitable,
is highly leveraged at 14 times its historical Ebitda with high capital spending.
Moody’s had noted in August that a key credit risk factor for Adani Green Energy, given its debts, was any reduction in the shareholding by TotalEnergies.
As part of the partnership, ANIL was to contribute its knowledge of the Indian market, execution capabilities, operations excellence, and capital management philosophy, while TotalEnergies was to bring its understanding of the global market, credit enhancement and financial strength to lower the financing costs along with expertise in underlying technologies.
ANIL plans to manufacture green hydrogen and its downstream products such as ammonia, urea, methanol, and ethanol at its Khavda and Mundra SEZ facilities. The Khavda site has a land bank of 71,000 acres, which has a large-scale renewable deployment potential of 20 GW due to its high wind and solar resource potential.
The company plans to use the alkaline and PEM electrolysis process to produce 2.5 million tonnes of green H2 annually (by FY31) at Khavda.
The electrolysers, used in the electrolysis process, are to be manufactured and supplied from the Mundra SEZ facility.
“We have 40 giga watt of land equivalent. We’ve been doing solar modules for the past five years. We know we will produce modules at 15 cents to 17 cents,” Robbie Singh, chief financial officer of
, had told ET on January 22.
Low cost of energy extraction will help it produce hydrogen at 30 cents per kg operating costs, he had said. “We plan to bring it to the market by the first or second quarter of 2026,” Singh had said.
H2 will be supplied from Khavda to Mundra SEZ through a 42-inch pipeline (a cost-effective way of transportation), where it will be used for the production of downstream products.
TotalEnergies has over 20 years of experience in H2 retailing infrastructure. It is operating 120 H2 refuelling stations across Germany, the Netherlands, Belgium and France. The company is planning to add 150 new HRS (hydrogen retail stations) across Europe by 2030 to further develop the H2 market for mobility in Europe.
The tie was to provide a seamless supply of H2 wherein ANIL was expected to become a secured steady source of H2 import.
Even before Hindenburg, Adani has been the subject of fierce global criticism for its continued investment in coal mining in India and Australia.
Adani’s rival
also aims to transition to green hydrogen production by 2025 and has announced $10 billion of investments in giga-factories for solar PV, battery storage, inverters, etc. and $10-12 billion in setting up 20 GW of captive renewable generation capacity augmented with storage. has partnered with Danish climate technology firm Stiesdal to accelerate cost reduction and commercialisation of its pressurized alkaline electrolyser technology. The company is also in talks to partner for electrolyser technology to set up a giga-scale electrolyser manufacturing facility at Jamnagar.
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