Adani Group Looking To Raise $4 Billion To Fund Green Hydrogen Plans: Report

Gautam Adani-led Adani Group is looking to raise up to $4 billion to develop manufacturing plants which will produce low-cost green hydrogen, people aware of the matter were quoted as saying by Bloomberg.

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Adani New Industries Ltd., a fully owned subsidiary of the Adani Enterprises Ltd. flagship, is set to spearhead the fundraising effort from both domestic and international banks. According to anonymous sources as quoted by Bloomberg, the company is in preliminary discussions with various lenders.

Back in June, TotalEnergies SE of France and Adani jointly announced their intention to invest $5 billion in India for the production of green hydrogen and associated products. This significant investment comes as India, the world's third-largest polluting nation, endeavors to decarbonize its economy. 

Gautam Adani, in earlier statements, emphasized that 75% of the group's anticipated capital expenditure will be directed toward green ventures. Moreover, his companies have ambitious plans to inject $20 billion into renewables, green component manufacturing, and associated infrastructure over the next decade.

“Green hydrogen holds a strong promise for India’s future energy self-reliance. It is not too difficult to imagine a scenario where green hydrogen at a price of less than $1/kg — coupled with the projected reduction in the cost of combined cycle hydrogen turbines and fuel cells — will not only allow the country to make a transition from fossil fuels, but also free India from the debilitating financial burden of energy imports,” states Adani’s website.

Adani New Industries is set to initiate an independent capital-raising effort, separate from Total, as per sources familiar with the matter. The primary allocation of these funds will be directed towards a green hydrogen facility with a production capacity of 1 million metric tons per annum, currently under construction in Gujarat. It is anticipated that production at this facility will commence in 2027.

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The successful completion of project financing would serve as a testament to the reestablished confidence of lenders in the Adani Group, particularly following the corporate fraud allegations made by Hindenburg Research in late January. While the Adani Group vehemently refuted these allegations, its bonds and shares experienced significant declines and have yet to fully recover to their previous levels. An inquiry mandated by India's market regulator is underway to assess whether the conglomerate has contravened any local securities laws.