TotalEnergies takes control of renewables firm for 1.5 billion euros

TOTALENERGIES agreed to buy the remaining shares in French clean-power developer Total Eren for 1.5 billion euros (S$2.2 billion), boosting the oil major’s foray into renewable energy.

Chief executive officer Patrick Pouyanne has pledged to spend US$5 billion this year on low-carbon energies – almost a third of total capital expenditure – as the company reduces its exposure to petroleum with ongoing sales of Canadian oil-sands assets and some of its European service stations.

By buying out the 71 per cent in Total Eren it doesn’t already own, TotalEnergies gains full control of a firm that has 3.5 gigawatts of solar, wind and hydropower in operation, with a project pipeline of more than 10 gigawatts, it said on Tuesday (Jul 25). The purchase should increase the net operating income of its power division by around 160 million euros next year, and operating cash flow by about 400 million.

The renewable energy company, founded in 2012 by Paris Mouratoglou and David Corchia, has assets in more than 20 countries, including Brazil, India and Greece. It recently teamed up with Kazakh partners to invest US$1.4 billion in a giant wind and battery-storage project in the Central Asian nation, and is also developing green hydrogen in North Africa, Latin America and Australia.

TotalEnergies bought an initial stake of 23 per cent in Eren for 237.5 million euros in 2017, and subsequently increased its interest to near 30 per cent. In the past year or so, the French major also snapped up 50 per cent of US renewable developer Clearway Energy Group for US$2.4 billion and 34 per cent of Brazil’s Casa dos Ventos for as much as US$580 million.

This month it also acquired a 50 per cent stake in a Turkish renewable company for an undisclosed amount, and pledged to pay Germany 5.8 billion euros to secure offshore wind leases for at least 25 years.