TotalEnergies SE (NYSE:TOT, EPA:TTE) is moving deeper into renewable energy, announcing an agreement to buy the remaining 71% stake in France-based clean power developer Total Eren that it didn’t already own in a US$1.66 billion deal.
The move gives TotalEnergies control of a company with more than 3.5 gigawatts of solar, wind and hydropower in operation, with a project pipeline of more than 10 gigawatts, according to a statement Tuesday.
Totral Eren, founded in 2012, is present in more than 20 countries, including India, Brazil and Greece. In Kazakstahn, the firm recently invested along with local partners some $1.4 billion in a giant wind and battery storage project, and in Latin America, the company is working on green hydrogen projects.
All told, that’s expected to boost the net operating income of the company’s power division by some nearly $200 million and operating cash flow by about $441 million.
The move is part of a pledge by TotalEnergies CEO Patrick Pouyanne to spend US$5 billion (nearly one third its capital expenditure) in 2023 on low-carbon energies. The goal is to reduce exposure to oil, which is also being achieved through the ongoing sale of its Canadian oil-sands assets.
TotalEnergies first bought a 23% stake in Total Eren for about $261 million in 2017 and subsequently upped that to 30%. Recently, the firm has also bought a 50% stake in US-based renewable energy firm Clearway Energy Group for $2.4 billion and a 34% interest in Brazil’s Casa dos Ventos for up to US$580 million.
It also purchased 50% of a Turkish renewable company for an unknown price and pledged to pay $6.4 billion to Germany in order to secure offshore wind leases for at least 25 years.
Shares of TotalEnergies fell 1.1% Tuesday morning to $59.88.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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