Malaysia’s Petronas to invest $1.6bn in Indian green ammonia

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Malaysian state-owned energy company Petronas is set to invest $1.6bn in an Indian green ammonia venture, in a boost to New Delhi’s ambitions to export energy.

The investment by Petronas’s Gentari renewables division will give it a 30 per cent stake in a green ammonia company incorporated by the founders of Indian renewables group Greenko, one of India’s largest wind and solar power producers and energy storage operators, according to two people with direct knowledge of the deal and two people briefed on it. 

It will be one of the top five biggest private capital raises in India so far this year, according to Dealogic data, and is the latest sign of international investor appetite for India’s growing renewable energy industry.

The investment values AM Green Ammonia Holdings at roughly $5.5bn, said a person with direct knowledge of the transaction. Bloomberg first reported the deal. 

Singaporean sovereign wealth fund GIC will also be investing, according to people with direct knowledge, who declined to say how much the investment would be worth. GIC is Greenko Energy Holdings’ biggest shareholder and has four non-executive seats on its board. 

Ammonia is considered “green” if it is made with hydrogen that is produced by electrolysis of water using renewable energy, and combined with nitrogen to become liquid.

While this makes the liquid form more readily transportable than hydrogen gas, it can also lead to emissions of nitrous oxide gas as a byproduct.

Under the investment agreement, AM Green Ammonia will produce 5mn tonnes of green ammonia by 2030, with operations across five Indian states, and will begin exporting it in the next two years.

Traditionally best known for its use in fertilisers, many companies and governments believe ammonia will help ease their dependence on fossil fuels.

Mahesh Kolli, Greenko’s group president and joint managing director, told the Financial Times that ammonia had become a “strategic molecule”.

With swaths of India soaked in sun for much of the year, investors are also eyeing the country’s potentially vast solar capacity for producing both hydrogen and ammonia using renewable energy. 

AM Green plans to build the world’s “lowest cost hydrogen delivery platform” by leveraging renewable energy generation and storage capabilities, Kolli added. The Greenko Group is already manufacturing electrolysers that are used in making green hydrogen alongside Belgian engineering company John Cockerill. Kolli said this would help reduce costs.

Other Indian companies have been involved in green hydrogen and ammonia deals this year. Tycoon Gautam Adani formed a joint venture with Japanese conglomerate Kowa to sell and market green hydrogen and derivatives in Japan, Taiwan and Hawaii. The Indian infrastructure giant has forecast that it will start green hydrogen by March 2027. 

In February, Greenko signed a memorandum of understanding with German energy company Uniper for green ammonia supply. Kolli said Greenko’s first delivery of green ammonia to Germany was scheduled for mid-2025. “That will be the first time India’s exporting energy,” he said, predicting it will be a “huge milestone for the country”. 

India, now the world’s third-largest oil importer, is aiming for energy independence by 2047 and has set a “net zero” emissions target of 2070. However, this is rated as “insufficient” to limit global warming to the goals of the Paris agreement, by the highly regarded Climate Action Tracker.

The green ammonia deal will also help Malaysia’s Petronas to meet its targets. It has set a target of a 30 per cent revenue contribution from non-traditional businesses by the end of this decade.

It has pledged to cap operational emissions to 49.5 million tonnes of carbon dioxide equivalent by 2024 in Malaysia, and achieve 25 per cent absolute emissions reduction groupwide by 2030 based on 2019 emissions data.

It has been investing in renewables through Gentari, as it seeks to reduce its reliance on oil and gas sales. Gentari in turn has invested in Indian renewables group ReNew Energy.

Singapore also has a strategic interest in green ammonia. The resource-starved city-state has adopted a national hydrogen strategy.

Like many global institutional investors, GIC has been building its bets on green hydrogen, last year investing alongside private equity firm Carlyle in the UK and US-based green ammonia project development company Eneus Energy.

Citi and Bank of America both advised on the deal. Petronas and GIC declined to comment.