Adani Group to materialise its $50 billion green hydrogen project with or without TotalEnergies

Earlier this year, TotalEnergies SE put investment in the venture on hold following allegations of fraud by US short-seller Hindenburg.

During an investor call discussing the first-quarter earnings of Adani Enterprises Ltd, Adani Group’s Chief Financial Officer Robbie Singh said that the project is not reliant on equity from TotalEnergies, according to a report in the media.

He stated that the group is proceeding with the investment regardless of whether the French company is involved or not.

TotalEnergies had previously reached an agreement to acquire a 25 percent stake in Adani New Industries Ltd (ANIL), the entity responsible for developing the green hydrogen project.

However, the French energy company decided to halt its planned USD 4 billion investment in February amid an ongoing investigation into allegations made by a US short seller’s accounting and stock manipulation allegations. Adani has denied these allegations.

ANIL, a subsidiary of Adani Enterprises Ltd, is responsible for developing the green hydrogen project as part of the Adani conglomerate's broader efforts. The memorandum of understanding (MoU) signed between ANIL and TotalEnergies remains valid, although TotalEnergies is in the process of conducting its due diligence before proceeding with the investment.

Adani and TotalEnergies have existing partnerships in city gas and renewable power ventures and the latter is welcome to look at the hydrogen project, he said.

"But that does not mean that the investment is a joint investment decision. The investment decision is still Adani Enterprises' and Adani Enterprise is continuing with that investment and we do not anticipate, or we do not think anything that we report in relation to the change of schedule on that," Singh was quoted as saying in the report.

Adani Group has ambitious plans to invest up to USD 50 billion over the next decade to establish a comprehensive green hydrogen ecosystem in India. The initial phase of the project aims to produce 1 million tonnes of green hydrogen, with plans to later increase production to 3 million tonnes.

Green hydrogen is produced using electricity from renewable sources, such as solar, to power the electrolysis process that separates hydrogen from water molecules.

To support this initiative, Adani plans to expand its solar module manufacturing capabilities at Mundra SEZ in Gujarat, potentially reaching up to 10 GW per annum. This facility will produce various components required for generating electricity from solar energy, such as metallurgical grade silicon, polysilicon, ingots, wafers, cells, and modules.

With the aim to ensure cost-effectiveness, seawater will be desalinated before it is used in the electrolysis process for producing low-cost green hydrogen. The primary expense in green hydrogen production is the cost of the electricity used.