Total steps up green push with EREN RE and Greenflex deals

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Oil giant Total has today further strengthened its expanding portfolio of clean tech interests through major investments in two of Europe’s leading green businesses.

The company announced it is to acquire energy efficiency consultancy and service provider GreenFlex for an undisclosed sum and has also signed a €237.5m agreement to acquire a 23 per cent stake in renewable energy developer EREN RE.

Total said the acquisition of GreenFlex – which was founded in 2009 and is forcasting revenues of more than €350m this year – will “accelerate the expansion of Total’s energy efficiency offering, over and above the growth of its affiliates BHC Energy in France and Tenag in Germany”.

The company said the move was part of a strategy to offer clients integrated energy efficiency solutions that incorporate the optimisation of energy needs, help accessing financing, and energy management and emissions measurement and reduction support.

Philippe Sauquet, president of gas, renewables and power at Total, said the deal was part of a long standing strategy that has seen the company acquire a number of leading clean tech firms in recent years.

“Climate challenges are integrated into Total’s strategy, and our aim is to be the responsible energy major,” he said in a statement. “This acquisition in energy efficiency services is fully aligned with this strategy. We are pleased to welcome GreenFlex and its employees to the Group. Total aims to make GreenFlex the linchpin of its growth in the energy efficiency industry in Europe.”

The transaction is expected to close in the fourth quarter of 2017, subject to approval by regulatory authorities.

Total has emerged as a major player in the green economy in recent years as it has sought to diversify its revenue streams and drive a transition towards a lower carbon model. The company has invested heavily in solar technologies, most notably as the majority shareholder SunPower, and last year snapped up French battery maker Saft in a €950m deal. It also announced earlier this year that it was planning to install solar arrays at 5,000 of its petrol stations globally over the next five years.

The purchase of a stake in EREN RE is in line with the firm’s acquisition strategy and sees Total secure an interest in a global renewables portfolio totalling 650MW of capacity either under operation or construction.

The capital injection for EREN RE means the company will be able to cover its financing needs to accelerate its development in the coming years, Total said.

It also confirmed that the terms of the deal, which is subject to regulatory approval, give Total the possibility of taking full control of EREN RE after five years, by which point the the company hopes to have built a portfolio totalling 3GW of capacity

Patrick Pouyanné, chairman and CEO of Total, said the deal was the latest step in the oil giant’s strategy to become “the responsible energy major”.

“EREN RE’s momentum will allow us to accelerate our growth in solar energy and move us into the wind power market,” added Sauquet. “The agreement with EREN RE is a major step towards our objective of achieving 5GW of installed capacity in five years. 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.”

David Corchia, CEO of EREN RE, said the investment would provide a boost to the company’s global expansion plans.

“As part of this agreement, EREN RE will retain its managerial autonomy that has made its success since the foundation, in particular its agility, flexibility and speed of strategic decisions and their implementation,” he added. “Thanks to our shareholders, the company, which was already one of the best capitalized players on the renewables market, will benefit from increased financial capacities to match its ambitions. This alliance is fully in line with our long-term vision: to transform an entrepreneurial project into a leading industrial group at international level.”