Total has signed an agreement with EREN Renewable Energy (EREN RE) to accelerate its growth in the production of power from renewable sources. Total will acquire an indirect interest of 23% in EREN RE by subscribing to a capital increase of EUR237.5 million (USD284.5 million). The agreement also gives Total the possibility to take over control of EREN RE after five years.
The completion of this transaction is subject to approval of the relevant competition authorities.
EREN RE has developed a diversified asset base (notably wind, solar and hydro) representing a global installed gross capacity of 650 megawatts (MW) in operation or under construction. Its ambition is to achieve a global installed capacity of more than 3 gigawatts (GW) within five years.The company is currently developing numerous projects in Asia-Pacific, Africa and Latin America. The capital increase subscribed by Total will enable EREN RE to cover its financing needs to accelerate its development in the coming years.
EREN RE, which will be renamed Total Eren upon completion of the transaction, will allow the Total to enter the wind power generation segment. Development of EREN RE’s solar farm business will be mainly focused on emerging countries where the demand for electricity is growing.
“Total integrates climate challenge into its strategy and is pursuing steady growth in low-carbon businesses, in particular in renewable energy. By partnering with EREN RE, we are leveraging a team that has a proven track record in renewable power production, and we are investing in an additional asset to accelerate our profitable growth in this segment, in line with our ambition to become the responsible energy major,” said Patrick Pouyanné, chairman and CEO of Total.
“In line with the Group’s integrated strategy along the oil and gas value chains, we are rebalancing our portfolio in renewables between the upstream manufacturing with SunPower and the downstream power production with EREN RE. Today we want to provide this high-potential company with the means to reach a new level and support its ambitions for international development,” said Philippe Sauquet, president, Gas, Renewables and Power.
“This strategic agreement allows us to join forces with a major energy player, with whom we share a strong desire for development in the renewable energy sector and an ambitious long-term vision. Our positioning is global and the Total Group’s strength in international markets represents a tremendous accelerator, ” said Pâris Mouratoglou, chairman of EREN RE.
As part of the agreement, EREN RE will retain its managerial autonomy, according to CEO of EREN RE David Corchia.
Total has been active in solar energy since 2011 as the majority shareholder in SunPower. In 2017, Total also set up its own affiliate, Total Solar, to develop solar power plants in developed countries and distributed solar systems for industrial and commercial customers (B2B). SunPower, which manufactures and markets the world’s most efficient photovoltaic solar panels, worldwide, will focus its development activities on distributed generation in the B2C and B2B markets in the United States.