French oil and gas group Total SA (EPA:FP) has agreed to acquire a 23% indirect stake in compatriot company EREN Renewable Energy (EREN RE) as it steps up its push into renewables.
Total will take the stake by subscribing to a EUR-237.5-million (USD 284.9m) capital increase that will help EREN RE speed up its business in the coming years. The renewables firm currently has 650 MW of wind, solar and hydro capacity in operation or under construction globally and aims to reach more than 3 GW within five years. It is developing a number of projects in Asia-Pacific, Africa and Latin America.
The deal includes an option for Total to take over control of EREN RE after five years. Following completion, which is subject to approval from competition regulators, EREN RE will be renamed Total Eren.
Philippe Sauquet, President Gas, Renewables and Power, said the EREN RE investment will allow Total to accelerate its growth in solar energy and enter the wind power market, as well as help it reach its goal of achieving 5 GW of installed capacity in five years.
Total is the majority owner of US solar company SunPower (NASDAQ:SPWR) and this year set up Total Solar to develop solar power plants in developed countries and distributed solar systems for industrial and commercial customers. Development of EREN RE's solar farm business will be mainly focused on emerging countries where electricity demand is growing, according to today's joint statement from the companies.
"In line with the Group's integrated strategy along the oil and gas value chains, we are rebalancing our portfolio in renewables between the upstream manufacturing with SunPower and the downstream power production with EREN RE," said Sauquet.