Industry Odisha Bureau, Oct 03: L&T is in talks to sell a minority stake in its clean energy arm. Japan’s Itochu is already a partner in its 300 KTPA Kandla green ammonia project. The aim is an export hub.
Large green ammonia projects need two things: capital and committed buyers. Larsen & Toubro is trying to find both in one partner. The engineering group is in talks with Japan’s Itochu Corporation. Itochu could take a minority stake in L&T’s clean energy business. It is already partnering on green ammonia offtake from Kandla in Gujarat.
Itochu Talks Deepen
The unit in question is L&T Energy GreenTech Ltd, or LTEGL. It is currently wholly owned by L&T. Itochu is one of Japan’s large general trading houses.
Subramanian Sarma, deputy managing director and president of L&T, confirmed the discussions. He said the talks cover equity participation, alongside the existing green ammonia offtake. He did not disclose the size of the stake Itochu may acquire. No transaction has been announced.
Kandla Takes Centre Stage
The talks centre on a 300 KTPA green ammonia project at Kandla. That capacity equals 300,000 tonnes a year. LTEGL is building it on a sizeable land parcel L&T acquired last year. The project is tied to Deendayal Port, formerly known as Kandla Port.
L&T’s FY26 annual report called the project a key part of its energy transition strategy. The company sees Kandla as a strategic export hub for green hydrogen derivatives.
Offtake Anchors the Project
In April, LTEGL signed a long-term take-or-pay agreement. It covers 300,000 tonnes of green ammonia a year from the proposed plant.
Under such contracts, buyers generally commit to paying for contracted volumes. That gives a developer visibility over future demand. Visibility matters because lenders want assurance that output will find a market. The agreement does not, by itself, settle the project’s financing.
The Singapore Link
Kandla’s output is expected to support Itochu’s bunkering operations in Singapore and elsewhere. Bunkering means supplying fuel to ships. Here, green ammonia would serve as a next-generation marine fuel.
The aim is to support shipping’s shift towards lower-carbon operations. Green ammonia remains at an early stage of adoption as a marine fuel.
Strategic Capital Enters the Model
So far, LTEGL has raised equity from its parent through rights issues. One issue was earmarked specifically for the Kandla project. Outside capital now appears to be the next step.
According to industry sources, LTEGL may offer minority stakes to other international partners. The goal would be to strengthen financing for its planned projects. No other investors have been named.
Developers of large hydrogen and ammonia projects increasingly combine three ingredients. These are development expertise, strategic capital and long-term offtake. Together, they can improve a project’s bankability. L&T has been building a clean energy platform spanning green hydrogen and green ammonia.
From Project to Export Hub
The significance goes beyond one potential minority stake. Kandla brings production, contracted demand, possible strategic capital and an overseas market together. Itochu could connect capital with market access through its bunkering network. Whether the equity talks conclude, and on what terms, remains to be seen.
