The decision may add to worries about the Indian group’s ability to finance its expansion, while it’s also a blow to TotalEnergies’ growth plans in India. In the past few years, the French company has built partnerships with Adani entities in renewables and natural gas.
Almost two years after a report by short seller Hindenburg Research accused the Adani Group of decades of fraud and market manipulation, federal prosecutors in the US alleged last week that Adani and a number of people around him promised more than $250 million in bribes to Indian government officials in exchange for solar energy contracts for Adani Green Energy Ltd. The Adani Group has denied the allegations.
Shares of Adani Green Energy dropped as much as 11% in Mumbai trading. TotalEnergies was 0.4% lower as of 12:12 p.m. in Paris.
“Until such time when the accusations against the Adani group individuals and their consequences have been clarified, TotalEnergies will not make any new financial contribution as part of its investments in the Adani group of companies,” the French company said in a statement on Monday.
TotalEnergies bought a minority stake in AGEL in January 2021, and now owns 19.75% of Adani Green. The French oil major also bought 50% stakes in three joint ventures with AGEL, which develops and operates renewable projects, in 2020, 2023 and in 2024. It paused a plan to develop about $5 billion of green hydrogen projects with another Adani entity following the release of the Hindenburg report.
TotalEnergies said it is not targeted nor involved in the facts described by the US indictment, and will take all relevant actions to protect its interests as a minority shareholder of AGEL, and as a joint-venture partner in projects with AGEL.
Its most recent deal with its Indian partner was announced in September. when it invested about $444 million into solar projects.
TotalEnergies said that its investments in Adani’s entities were “undertaken in full compliance with applicable laws,” and with its own internal governance processes pursuant to due diligence and representations made by the sellers. TotalEnergies was not made aware of the existence of an investigation into the alleged corruption scheme, the company said on Monday.
In March, Bloomberg News reported that US prosecutors had widened their probe of India’s Adani Group to focus on whether the company or people linked with the company may have engaged in bribery. Bloomberg’s story was based on discussions with people with direct knowledge of the matter.
The French energy company, which is counting on liquefied natural gas sales and renewables to boost its growth in coming years, is now forced to reconsider its expansion plans in India, which was meant to fuel the group’s development in Asia.
TotalEnergies had 6.7 gigawatts of gross installed renewables capacity in India at the end of the third quarter, accounting for more than a quarter of the group’s overall clean-power projects in operation. Most of these solar and wind farms are jointly held with Adani Green, although TotalEnergies also develops renewable projects in India in a partnership with Electricite de France SA.
TotalEnergies also had 3.9 gigawatts of solar project under construction in the country at the end of September. Renewable projects under development in India amounted to 2.3 gigawatts, accounting for about 4% of the group’s pipeline of projects worldwide.
(Bloomberg, November 25, 2024)