TotalEnergies completes renewable energy acquisition
25 July 2023
Total Eren has 10 GW of projects in pipeline
TotalEnergies has acquired 100% of renewable energy project developer Total Eren.
The deal follows the strategic agreement signed between TotalEnergies and Total Eren in 2017, which granted TotalEnergies the right to acquire all of Total Eren (formerly EREN RE) after a five-year period.
Total Eren has 3.5 GW of renewable capacity in operation worldwide and a solar, wind, hydroelectric and storage projects pipeline of over 10 GW in 30 countries, of which 1.2 GW are in construction or late-stage development. TotalEnergies will leverage Total Eren’s 2 GW assets in operation in merchant countries (notably Portugal, Greece, Australia, and Brazil) to build up its integrated power strategy. TotalEnergies will also benefit from Total Eren’s footprint and ability to develop projects in other countries such as India, Argentina, Kazakhstan, or Uzbekistan.
Along with its activities as a renewable energy producer, Total Eren has launched pioneering green hydrogen projects in recent years, located in various regions, such as North Africa, Latin America, and Australia. These green hydrogen activities will be pursued through a new partnership in an entity named “TEH2” (80% owned by TotalEnergies and 20% owned by EREN Group).
“Our partnership with Total Eren has been very successful, as shown by the size and quality of the renewables portfolio,” said Patrick Pouyanné, Chairman & CEO of TotalEnergies. “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.”
As part of this transaction, Total Eren is valued at an Enterprise Value of €3.8 billion based on an attractive EBITDA multiple negotiated in the initial strategic agreement signed in 2017. The acquisition of 70,8%1 represents a net investment of around €1.5 billion for TotalEnergies.
Total Eren’s integration should result in an increase in TotalEnergies’ Integrated Power Net Operating Income of around €160 million and CFFO of around €400 million in 2024.