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

Adani New Industries Ltd (ANIL), a wholly-owned subsidiary of Adani Enterprises, has allocated $2.5 billion towards the development of a comprehensive backward-integrated value chain for its ambitious green hydrogen project. Sources indicate that ANIL is on track to execute the first phase of the project, aiming for an annual capacity of 1 million tons by the fiscal year 2027. The green hydrogen plant is strategically located in Mundra, Gujarat.

The forward-looking plan outlines an ambitious goal of scaling up the project's capacity to 3 million tons over the next decade, contingent on market conditions and the success of the initial phase. This expansion initiative comes with a hefty investment of $50 billion.

The backward integration strategy encompasses the establishment of a fully integrated value chain, incorporating solar, wind, electrolysers, and associated equipment for the production of green hydrogen and its sustainable derivatives.

Key components of the green hydrogen project include solar-polysilicon, ingots, wafers, cells, modules, and wind turbine generators. Adani Group is placing a significant emphasis on the production of supply chain products to facilitate green hydrogen generation, with downstream derivatives such as green ammonia, green methanol, and sustainable aviation fuels.

The solar value chain's backward integration, spanning from polysilicon to modules, is being developed as part of the electronic manufacturing cluster at Mundra. Joint ventures have been formed for the production of ethylene vinyl acetate, back sheets, aluminum frames, and glass. ANIL has also successfully developed a 5.2 MW wind turbine generator.

In a strategic move to enter international markets, Adani Enterprises had previously announced a joint venture with Kowa Holdings Asia Pte in September. The collaboration aims to sell and market green ammonia, green hydrogen, and its derivatives in Japan, Taiwan, and Hawaii.

To fund these ambitious projects, the Adani Group plans to tap into domestic bond markets, alongside bank loans and other lines of credit. The recent statement from Group Chief Financial Officer Jugeshinder Singh highlighted the group's intention to secure substantial investments totaling $84 billion in infrastructure projects over the next decade, with an increased focus on domestic bond markets for future funding. The group has predominantly issued bonds in the US market until now.

HBL