L&T Group Announces $4 Billion Funding Initiative for Green Hydrogen Projects

Larsen & Toubro (L&T), a prominent engineering conglomerate, in collaboration with its partners, Indian Oil Corporation (IOCL) and ReNew, a clean energy company, is embarking on an ambitious journey into the green hydrogen sector, with plans to invest an impressive sum of up to $4 billion (approximately Rs 32,000 crores) over the span of three to five years. This significant financial commitment was confirmed by the CEO and Managing Director of L&T, S N Subrahmanyan.

L&T's strategic alliance with state-owned Indian Oil Corporation and ReNew underscores their concerted efforts in driving the green hydrogen agenda. Highlighting the specifics, Subrahmanyan outlined that a substantial portion of the allocated funds, roughly around Rs 500 crore, will be dedicated to the development of electrolyzers. Additionally, the collaborative joint venture between L&T, IOCL, and ReNew will be instrumental in establishing green hydrogen plants. Subrahmanyan noted that this joint venture holds the potential to extend its scope beyond IOCL to encompass other entities interested in setting up green hydrogen plants. The estimated investment in this venture is projected to reach the $4 billion mark.

Assurance of financial viability is not a concern, as the conglomerate believes that the combined resources of the three partnering companies will be sufficient to fuel these endeavors. L&T intends to finance this venture through internal accruals. To ensure effective logistical operations, discussions with state governments are in progress to acquire additional land near the port for the transportation of green hydrogen and ammonia.

In a strategic move, L&T entered into a partnership with H2Carrier, a Norway-based company, earlier this year. The focus of this collaboration is the development of floating green ammonia projects, designed to cater to industrial-scale applications. Further solidifying their position in the field, L&T forged an agreement with McPhy Energy, a prominent French electrolyzer technology and manufacturing company, in March. This agreement grants L&T an exclusive license for McPhy's pressurized alkaline electrolyzer technology, enabling L&T to manufacture electrolyzers along with future product enhancements. A pivotal step in this direction involves establishing a one-gigawatt-scale manufacturing facility for electrolyzers in India, based on McPhy's technology. This facility will not only cater to domestic requirements but also extend its services to select international markets.

To enhance their commitment to carbon neutrality by 2040, L&T has established the L&T Green Energy Council, a four-member think-tank comprising global leaders. This council will play a crucial role in identifying emerging technology trends in the realm of green energy.

L&T's resolute steps toward green hydrogen underscore the growing importance of sustainable energy solutions in the global industrial landscape. With significant investments, innovative partnerships, and a determined focus, the conglomerate is poised to play a pivotal role in shaping the future of green hydrogen initiatives.