Business Energy

Total Quadran, a French Total subsidiary, farms down a pair of renewable energy projects

Total Quadran is a Total subsidiary that produces renewable electricity exclusively. The French unit has a farm-down business model for the renewables development business. The farm down has been made to Credit Agricole Assurances and Banque des Territoires. In each case, it has surrendered 50%of its equity. As far as the former is concerned, the total capacity it received was 285 MW. That’s after acquiring a 50% stake in 44 solar power plants with a total capacity of 182 MW and nine wind farms amounting to 103 MW. On the other hand, Banque des Territoires acquired a capacity of up to 53 MW. That’s following the acquisition of half of the eight solar farms’ stakes, and all of them are in New Caledonia.

Going by the capacities of the two portfolios, that’s almost 340 MW. Its enterprise value is approximately $600 million, and it comes bearing several benefits. Some of them are increasing its return on equity, accelerating the cash flow recognition, and de-risking the group’s portfolio. According to Total’s Senior Vice President Renewables, Julien Pouget, the company plans to get more than a 10% return on equity. For it to achieve that, it has come up with a business model to guide it as far as renewable energy development is concerned. He added that the two farm downs are part of this business model implementation. Equally important, Total looks forward to having even a deeper partnership with Credit Agricole Assurances and the Banque des Territoires in the future.

On the other hand, Credit Agricole Assurances Jean-Jacques Duchamp said that the move would assist in its goal. After all, its aim is diversification on behalf of its customers. It is also essential to add that it hopes of becoming a long-term institutional investor. Whether it is its commitments in matters of climate or support for a low-carbon economy or energy transition, the transaction is in line with all that. Duchamp also expressed the company’s pride in collaborating with Total. He added that it would play a massive role in increasing the firm’s contribution to its energy transition and the rest of the world.

The Department of Energy and Environmental Transition at the Banque des Territoires pointed out how determined the company is in providing energy transition players the support it needs and, as a matter of fact, long-term one. Its head, Emmanuel Legrand, said that the acquisition is an illustration of the same. Its support will be available to French overseas territories as well as mainland France in new renewable energy deployment projects.