Today, TotalEnergies announced that it is buying out Total Eren’s (formerly EREN RE) other shareholders, increasing its stake from close to 30% to 100%.
While previously, the French-based player majored in the oil and gas sectors, the new move accomplishes its pursuit of profitable growth in the renewable energy sector.
The acquisition seeks to expand the TotalEnergies’ Renewables business unit, where Total Eren teams will be fully integrated
“Our partnership with Total Eren has been very successful, as shown by the size and quality of the renewables portfolio. With the acquisition and integration of Total Eren. We are now opening a new chapter of our development as the expertise of its team and its complementary geographical footprint will strengthen our renewable activities and our ability to build a profitable integrated power player,” said the Chairman & CEO of TotalEnergies, Patrick Pouyanné.
The agreement builds on the strategic agreement struck in 2017 by TotalEnergies and Total Eren, which gave TotalEnergies the right to buy Total Eren after five years fully.
TotalEnergies is buying out 70.8% of Total Eren in a net investment of around €1.5 billion ($1.6 billion) for TotalEnergies.[1]
Total Eren integration is expected to boost TotalEnergies’ Integrated Power Net Operating Income by €160 million and CFFO by €400 million in 2024.
Who are Total Eren, and How Does the Acquisition Benefit TotalEnergies?
Total Eren is an Independent Power Producer (IPP) and operator of renewable energy power plants worldwide over the long term.
They operate 3.5 GW of renewable capacity globally and have over 10 GW of solar, wind, hydroelectric, and storage projects in 30 countries, with 1.2 GW in construction or late-stage development.
TotalEnergies plans to use Total Eren’s 2 GW assets in merchant countries like Portugal, Greece, Australia, and Brazil for an integrated power strategy.
The company also benefits from Total Eren’s global project development capabilities in India, Argentina, Kazakhstan, and Uzbekistan.
Total Eren will provide high-quality assets and internal and external expertise from nearly 500 people across 20 countries, which the company has grown since its inception in 2012.
Total Eren’s portfolio will enhance TotalEnergies’ production growth, optimizing operating costs and capex by leveraging its size and purchasing bargaining power.
Total Eren has launched green hydrogen projects in North Africa, Latin America, and Australia.
They noted that these projects will be pursued through a new partnership called “TEH2,” where TotalEnergies own 80% and 20% is under the control of EREN Group.
References
- TotalEnergies, ‘TotalEnergies Fully Acquires Total Eren After a Successful Strategic Alliance of Five Years’, 25 July 2023, https://totalenergies.com/media/news/press-releases/electricity-totalenergies-fully-acquires-total-eren-after-successful[↩]
