Indian tycoon Adani prepared to go solo on hydrogen mega-project

India's Gautam Adani is prepared to go it alone in spending billions of dollars on developing green hydrogen in India, after TotalEnergies SE put a plan to partner in the venture on hold.

The French energy giant had agreed to buy a 25 per cent stake in Adani New Industries Ltd. for an undisclosed sum to help fund green hydrogen projects in India, as the world's third-largest polluter seeks to decarbonize. But Total suspended its investment in February, pending investigation of a short seller's allegations of fraud at the Adani Group, charges that the conglomerate has denied.

Adani's first green hydrogen venture is a $5 billion integrated facility that will also include manufacturing plants for wind turbines and solar modules and renewable generation capacity. The project is a starting point for the group's longer term plan to invest more than $50 billion through the end of the decade in developing the fuel.

Building the facility isn't dependent on Total's equity, Jugeshinder Singh, chief financial officer at the billionaire's flagship firm, Adani Enterprises Ltd., told investors last week, according to a transcript posted on the company's website. "We are going ahead with the project as it is and at the same pace."

Renewed confidence

Singh's comments could signal that the group is winning back support from investors and lenders after months of turmoil following the short seller's charges.

Tycoons like Adani and his rival Mukesh Ambani are betting on green hydrogen as Prime Minister Narendra Modi seeks to establish India's leadership in the new technology, which is being eyed as a replacement for fossil fuels across a variety of industries, from steel to oil refining and fertilizers. The nation aims to produce 5 million tons a year by 2030, and has set its sights on both the export market as well as an expanding domestic demand.

Total has already made four investments in Adani firms and Singh said the memorandum of understanding on hydrogen still holds. "If they express an interest in the fifth investment, we will naturally say, sure, no problems," he said. But that doesn't mean it's a joint investment decision, he added.

Adani Enterprises will invest about $300 million in the hydrogen business in the year through March and this will start to rise rapidly from next year, Singh said. Overall, the company plans $3.7 billion in capital investment during the year, he said.