Renewables: TotalEnergies Acquires a Portfolio of Hydropower Projects in Africa to Deploy its Multi-Energy Strategy

Rhea-AI Summary

TotalEnergies has signed an agreement to acquire 100% of Scatec's subsidiary SN Power, gaining interests in renewable hydropower projects in Africa. The acquisition includes a 28.3% stake in Uganda's Bujagali hydropower plant (250 MW capacity) and minority stakes in projects under development in Rwanda (260 MW) and Malawi (360 MW). This move aligns with TotalEnergies' multi-energy strategy and commitment to Africa's energy transition.

The transaction, subject to certain conditions, will expand TotalEnergies' hydropower portfolio, which currently includes 3.7 GW of gross capacity worldwide. This acquisition supports the company's ambition to achieve net-zero emissions by 2050 and its goal of reaching 35 GW of renewable electricity generation capacity by 2025.

Positive

• Acquisition of renewable hydropower assets in Africa, expanding TotalEnergies' clean energy portfolio
• 28.3% stake in operational Bujagali hydropower plant in Uganda, covering over 25% of the country's peak electricity demand
• Minority stakes in two hydropower projects under development in Rwanda (260 MW) and Malawi (360 MW)
• Aligns with TotalEnergies' multi-energy strategy and supports Africa's energy transition
• Contributes to TotalEnergies' goal of reaching 35 GW in renewable electricity generation capacity by 2025

Negative

• None.

Energy Industry Analyst

TotalEnergies' acquisition of SN Power's hydropower assets in Africa marks a significant step in the company's multi-energy strategy and its commitment to the continent's energy transition. This move is particularly noteworthy for several reasons:

• The acquisition of a 28.3% stake in Uganda's Bujagali hydropower plant is strategically important. With a capacity of 250 MW, covering 25% of Uganda's peak electricity demand, this asset provides TotalEnergies with a substantial foothold in the country's power sector.
• The additional stakes in projects under development in Rwanda (260 MW) and Malawi (360 MW) further expand TotalEnergies' renewable energy portfolio in Africa, positioning the company as a key player in the region's energy transition.
• This acquisition aligns with TotalEnergies' broader goal of reaching 35 GW of renewable electricity generation capacity by 2025 and producing over 100 TWh of net electricity by 2030.

The move demonstrates TotalEnergies' commitment to diversifying its energy portfolio and supporting African countries in their energy transition. However, investors should note that the transaction's completion is subject to certain conditions, which may affect the timeline and final outcome of the deal.

Financial Analyst

While specific financial details of the acquisition were not disclosed, this transaction carries several implications for TotalEnergies' financial outlook:

• The acquisition of operational assets, particularly the stake in the Bujagali plant, should contribute to immediate revenue generation and potentially improve the company's cash flow.
• The projects under development in Rwanda and Malawi represent future growth opportunities but will require capital expenditure in the short to medium term.
• This move aligns with TotalEnergies' strategy to build a diverse, cost-competitive portfolio of renewable and flexible assets, which could enhance long-term profitability and stability.
• The expansion into hydropower complements TotalEnergies' existing renewable portfolio, potentially offering more stable baseload power generation compared to intermittent sources like solar and wind.

Investors should consider how this acquisition fits into TotalEnergies' broader capital allocation strategy and its potential impact on the company's financial metrics, including debt levels and return on invested capital. The transaction's value and its immediate impact on earnings will be important factors to watch for in upcoming financial reports.

Geopolitical Risk Analyst

TotalEnergies' expansion in African hydropower through this acquisition presents both opportunities and challenges from a geopolitical perspective:

• The investment in Uganda's energy infrastructure could strengthen TotalEnergies' relationship with the government, potentially benefiting its oil projects in the country. However, it also increases the company's exposure to political risks in Uganda.
• By investing in critical infrastructure across multiple African countries (Uganda, Rwanda, Malawi), TotalEnergies is positioning itself as a key player in regional energy security. This could provide diplomatic leverage but also expose the company to geopolitical tensions.
• The focus on renewable energy aligns with global climate goals and could improve TotalEnergies' standing with international organizations and environmentally conscious investors.
• However, large-scale hydropower projects can be controversial due to their environmental and social impacts, potentially leading to reputational risks and local opposition.

Investors should monitor how TotalEnergies navigates these complex geopolitical landscapes and manages relationships with various stakeholders, including governments, local communities and environmental groups. The company's ability to balance its fossil fuel interests with renewable investments in Africa will be important for its long-term success in the region.

PARIS--(BUSINESS WIRE)-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) has signed an agreement with Scatec, a Norwegian renewable energy company, to acquire 100% of its subsidiary SN Power, which holds interests in renewable hydropower projects in Africa, through a joint venture (51% SN Power) with Norfund and British International Investment (BII).

As a result of this transaction, which is subject to certain previous conditions, TotalEnergies will acquire a 28.3% stake in the Bujagali hydropower plant currently in operation in Uganda. With a capacity of 250 MW, it covers more than 25% of the country's peak electricity demand.

TotalEnergies will also acquire minority stakes in two projects under development in Rwanda (260 MW) and Malawi (360 MW).

“This acquisition of renewable hydroelectric assets and projects in Africa reflects our desire to contribute to the continent's energy transition by bringing electricity to the people of African countries. In particular, we are delighted to be able to become a player in hydro power in Uganda, a country where we are also developing a major oil project. This is another example of TotalEnergies’ ability to implement its multi-energy strategy in oil-producing countries to support them in their energy transition,” said Patrick Pouyanné, Chairman and CEO of TotalEnergies.

“We are pleased to announce today’s transaction, as we believe TotalEnergies will be a strong asset owner going forward, with the ability to further develop the projects and contribute to the energy transition in Africa. We would like to thank the entire hydropower team for their hard work and dedication over the years, you have made a significant impact. In addition, our gratitude goes to our joint venture partners, host governments, and lenders for the support since 2020,” said Terje Pilskog, CEO of Scatec.

To date, TotalEnergies has interests in a number of hydropower projects with a gross capacity of 3.7 GW worldwide:

• 218 MW installed in France (19 MW), Portugal (33 MW) and Turkey (166 MW)

• 1.5 GW under development in Mozambique (Mphanda Nkuwa project)

• 2 GW under development by Adani Green in India

***

TotalEnergies and electricity
As part of its ambition to get to net zero by 2050, TotalEnergies is building a world class cost-competitive portfolio combining renewables (solar, onshore and offshore wind) and flexible assets (CCGT, storage) to deliver clean firm power to its customers. At the end of 2023, TotalEnergies’ gross renewable electricity generation installed capacity was 22 GW. TotalEnergies will continue to expand this business to reach 35 GW in 2025 and more than 100 TWh of net electricity production by 2030.

About TotalEnergies
TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations.

@TotalEnergies TotalEnergies TotalEnergies TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

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TotalEnergies Contacts

Media Relations: +33 (0)1 47 44 46 99 l presse@totalenergies.com l @TotalEnergiesPR

Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com

Source: TotalEnergies SE

FAQ

What hydropower assets has TotalEnergies (TTE) acquired in Africa?

TotalEnergies has acquired a 28.3% stake in the Bujagali hydropower plant (250 MW) in Uganda and minority stakes in two projects under development in Rwanda (260 MW) and Malawi (360 MW).

How does this acquisition align with TotalEnergies' (TTE) strategy?

The acquisition aligns with TotalEnergies' multi-energy strategy, supporting Africa's energy transition and contributing to the company's goal of reaching 35 GW in renewable electricity generation capacity by 2025.

What is the significance of the Bujagali hydropower plant acquired by TotalEnergies (TTE)?

The Bujagali hydropower plant in Uganda has a capacity of 250 MW and covers more than 25% of the country's peak electricity demand, making it a significant asset in TotalEnergies' renewable energy portfolio.

How much renewable electricity generation capacity does TotalEnergies (TTE) aim to achieve by 2025?

TotalEnergies aims to reach 35 GW of renewable electricity generation capacity by 2025, with this acquisition contributing to that goal.