Total takes control of renewables firm for US$1,66bn

TotalEnergies SE agreed to buy the remaining shares in French clean-power developer Total Eren for €1,5 billion (US$1,66 billion) from Eren Groupe SA and a group of financial investors, 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 percent in Total Eren it doesn’t already own, TotalEnergies gains full control of a firm that has 3,5 gigawatts of operating solar, wind and hydropower assets, with a project pipeline of more than 10 gigawatts, it said Tuesday.

The purchase should increase the net operating income of its power division by around €160 million next year, and operating cash flow by about €400 million.

The renewable energy company, founded in 2012 by Paris Mouratoglou and David Corchia, operates 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.

Eren Groupe SA, which is led by Mouratoglou and Corchia, said it will use the proceeds of the Total Eren
sale to further invest in the energy management in buildings, energy recovery from organic sludge and wastewater, biomass farming as well as renewable gas and green hydrogen production.

The company will also keep investing in new nuclear technologies after buying stakes in reactor startups Jimmy Energy and Naarea last year.

Minority stake

Bpifrance, Tikehau Capital SCA, Peugeot Invest and Next World Capital LLC, which have been investing in Total Eren in several steps since 2015, sold their minority stake to TotalEnergies, according to a joint statement Tuesday. They earned more than twice the amount they invested.

TotalEnergies bought an initial stake of 23 percent in Eren for €237,5 million in 2017, and subsequently increased its interest to near 30 percent. In the past year or so, the French major also snapped up 50 percent of US renewable developer Clearway Energy Group for US$2,4 billion and 34 percent of Brazil’s Casa dos Ventos for as much as US$580 million.

This month it also acquired a 50 percent stake in a Turkish renewable company for an undisclosed amount, and pledged to pay Germany €5,8 billion to secure offshore wind leases for at least 25 years. — Bloomberg