French energy giant TotalEnergies has sold a 50% stake in a 2GW US solar and energy storage portfolio and acquired German renewable energy developer VSB Group as part of its capital recycling strategy.
The US portfolio comprises three solar projects with a combined 1.7GW generation capacity and two battery storage projects with a combined 300MW output, all in the state of Texas. TotalEnergies sold a 50% stake in the sites to New York-based asset management fund Apollo.
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The transaction is worth US$800 million – US$550 million in equity funds from Apollo and US$250 million in shareholder loan refinancing.
TotalEnergies commissioned two of the projects – the Danish Fields (720MW) and Cottonwood (445MW) projects – in September. Both sites have pre-existing power purchase agreements (PPAs) in place with construction materials manufacturer Saint-Gobain.
On the other side of its capital recycling business model, TotalEnergies has acquired German renewable energy developer VSB group for €1.57 billion (US$1.65 billion). VSB has a European pipeline of 18GW of solar, wind and battery storage projects, primarily in Germany, Poland and France.
TotalEnergies said the acquisition will support its Integrated Power business model, which will see it combine renewable energy generation and power flexibility assets. It said it would sell up to 50% of its wholly owned renewable energy assets in order to meet the plan’s 12% profitability target.
“In line with our strategy, these transactions will enable us to optimise our capital allocation in renewables and contributes to improve the profitability of our Integrated Power business,” said Stéphane Michel, president of Gas, Renewables and Power at TotalEnergies.
PPA with Saudi Power Procurement Company
Elsewhere this week, TotalEnergies signed a 25-year PPA with the Saudi Power Procurement Company (SPPC) for the 300MW Rabigh 2 solar PV project.
TotalEnergies will develop and build the project in consortium with Saudi project developer Aljomaih Energy and Water Company (AEW). It is forecast to be operational in 2026.
The project was awarded as part of the fifth round of the Nation Renewable Energy Programme (NREP), the SPPC’s public solar capacity tender scheme. The SPPC confirmed a shortlist of bidders for the 3.6GW capacity auction in October.
“Through our large participation in refining and petrochemical Satorp and Amiral projects, TotalEnergies is a close partner of the Kingdom of Saudi Arabia,” said TotalEnergies chairman and CEO Patrick Pouyanné.
According to estimates by Think Tank Reclaim Finance, TotalEnergies’ energy mix will comprise 80% oil, gas and LNG in 2030, compared with 17% from gas-fired power stations and solar and wind.
A report from Mercom Capital Group said that TotalEnergies was the leading global solar PV developer in 2023, based on its operational, under-construction and PPA-contracted projects.
