L&T may sell minority stake in its clean energy arm

Larsen & Toubro (L&T) is considering selling a minority stake in its clean energy subsidiary, L&T Energy GreenTech Ltd. (LTEGL), in a strategic partnership with Japan's Itochu Corporation. The deal aims to develop a 300 kilo tonnes per annum (ktpa) green ammonia project at Kandla port in Gujarat, India. Subramanian Sarma, deputy managing director and president of L&T, revealed that the Japanese general trading giant is also involved in the green ammonia off-take.

LTEGL, which already raised equity through rights issues for its green ammonia development project at Deendayal Port, plans to build the Kandla facility on a substantial land parcel acquired by L&T last year. The project will supply 300,000 tonnes per annum of green ammonia, which will support Itochu's bunkering operations in Singapore and other locations.

This partnership is expected to foster the early adoption of green ammonia as a next-generation marine fuel, contributing to the shipping industry's transition towards low-carbon operations.

As developers of large green hydrogen and ammonia projects increasingly seek strategic partnerships to bolster financing, L&T sees the Kandla project as a crucial part of its energy transition strategy. The conglomerate is actively exploring the possibility of offering minority stakes in its green ammonia projects to other international partners, aiming to bolster external capital and strengthen the financing of its planned projects.

L&T's FY26 annual report identified the 300 KTPA Kandla project as a key component of its energy transition strategy, signifying the company's commitment to clean energy solutions.