Adani Group Invests $2.5 Billion in Developing Green Hydrogen Value Chain

Adani New Industries Ltd (ANIL), a fully-owned subsidiary of Adani Enterprises, has reportedly invested $2.5 billion in developing an integrated value chain for its ambitious green hydrogen project. As per insider sources, the first phase of the project, which aims to have an annual capacity of 1 million tons, is on track to be operational by FY27.

ANIL's long-term plan is to ramp up this capacity to 3 million tons within the next decade, entailing an estimated investment of $50 billion. However, it's worth noting that these plans hinge on market conditions and the success of the project's initial phase. The green hydrogen plant is being established at Mundra in Gujarat, India.

ANIL's strategy for its green hydrogen project involves comprehensive backward integration. This entails developing a fully integrated value chain that encompasses solar, wind, electrolysers, and associated equipment necessary for the generation of green hydrogen and its sustainable derivatives.

Green hydrogen is a significant focus area for the Adani Group, which is investing heavily in the production of supply chain products essential for green hydrogen generation. These include solar polysilicon, ingots, wafers, cells, modules, and wind turbine generators. The downstream derivatives product portfolio includes green ammonia, green methanol, and sustainable aviation fuels.

The company is undertaking the backward integration of the solar value chain, ranging from polysilicon to modules, as part of the electronic manufacturing cluster at Mundra. It has formed joint ventures to produce ethylene vinyl acetate, back sheets, aluminium frames, and glass. Additionally, ANIL has also developed a 5.2 MW wind turbine generator.

Further emphasizing its commitment to green energy, Adani Enterprises announced in September the formation of an equal joint venture with Kowa Holdings Asia Pte. This partnership aims to sell and market green ammonia, green hydrogen, and their derivatives in markets such as Japan, Taiwan, and Hawaii.

To fund these ambitious projects, ANIL plans to raise capital by exploring various avenues. These include tapping into domestic bond markets, securing bank loans, and leveraging other lines of credit. The group's Chief Financial Officer, Jugeshinder Singh, recently revealed that the group intends to invest a whopping $84 billion in infrastructure projects over the next decade. He also indicated a shift in the group's fundraising strategy, with a greater emphasis on approaching domestic bond markets. This marks a significant departure from the group's previous focus on US bond issuances.

In conclusion, Adani New Industries Ltd's significant investment in its green hydrogen project represents a major stride in the pursuit of sustainable energy solutions. By developing an integrated value chain and committing to substantial future investments, the company is positioning itself as a key player in the global green hydrogen market. As this project unfolds, it will undoubtedly influence the trajectory of India's renewable energy sector and potentially catalyze a broader shift towards a sustainable hydrogen economy.