French energy major TotalEnergies has fully acquired independent power producer (IPP) Total Eren, increasing its operating income and tapping into opportunities in multiple foreign markets.
After the acquisition, TotalEnergies will increase its stake from close to 30% to 100%. Currently, Total Eren has 3.5GW of renewable capacity in operation worldwide, while it also has a 10GW project pipeline, including solar, wind, hydroelectric and energy storage projects in 30 countries, of which 1.2GW are in construction or late-stage development.
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Moreover, TotalEnergies can expand its footprint by leveraging Total Eren’s 2GW of operational assets in markets such as Portugal, Greece, Australia, and Brazil. TotalEnergies can also benefit from Total Eren’s footprint and ability to develop projects in India, Argentina, Kazakhstan, or Uzbekistan.
The acquisition represented a net investment of around €1.5 billion (US$1.66 billion) for TotalEnergies. The transaction followed an agreement signed between TotalEnergies and Total Eren in 2017, which granted TotalEnergies the right to acquire all of Total Eren after a five-year period. As part of this transaction, Total Eren was valued at an enterprise value of €3.8 billion (US$4.2 billion) based on an EBITDA multiple negotiated in the initial strategic agreement signed in 2017.
“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 Patrick Pouyanné, chairman and CEO of TotalEnergies.
In addition to this transaction, TotalEnergies also acquired a 50% stake in Turkish contracting and investment company Rönesans Enerji. After the acquisition, both companies will co-develop renewable projects in Turkey.
Operating a portfolio of 166MW hydro assets, Rönesans Enerji also boasted a pipeline of more than 700MW of wind, solar PV, and battery storage assets. Rönesans Enerji is planning to produce 2GW of renewable energy by 2028, with the power being sold directly to the electricity market or end-buyers via power purchase agreements (PPAs).
“Given the outlook for the Turkish market and the quality of the renewable sites in the country, we are convinced that this new partnership will be a further step towards our goal of developing our Integrated Power activity profitably,” said Stéphane Michel, president of gas, renewables and power for TotalEnergies.