Engineering giant Larsen & Toubro (L&T) is embarking on a new path in India’s green hydrogen landscape by embracing the asset ownership model, a departure from its usual asset-light stance, company officials revealed.

In a significant departure, L&T has chosen both asset ownership and operatorship for its foray into the green hydrogen sector, while also establishing a subsidiary to consolidate its green energy interests. These strategic shifts aim to facilitate build-own-operate opportunities, opening the door for potential financial partnerships in the future if required.

Last week, L&T joined hands with Indian Oil Corporation (IOC) and Renew to establish a joint venture company named GH4India Private Limited, with each partner holding a 33.33% stake.

The joint venture’s focus is on developing green hydrogen, its derivatives, and associated renewable assets under various ownership and operatorship models. Unlike just manufacturing equipment, L&T aims to market green hydrogen.

Derek M. Shah, Senior Vice President and Head of L&T Energy’s Green Manufacturing and Development division, noted, “L&T maintains its strategy of pursuing an asset-light approach. We also recognize the opportunities in the energy transition journey.”

GH4India enables L&T to explore Build Own Operate (BOO) avenues in the green hydrogen and derivatives space while ensuring non-dilution of L&T’s ownership.

L&T’s leadership anticipates investing approximately $3-4 billion collectively with its partners over the next three to five years.

While L&T had shifted to an asset-light model over a decade ago, recent moves underscore its changing approach. A solo endeavor involves establishing an electrolyzer manufacturing facility in Gujarat.

In July, L&T revealed that its subsidiary, L&T Energy Green Tech, would serve as a holding company to streamline its green energy endeavors, including electrolyzer manufacturing.

This strategic shift is a departure from L&T’s conventional model of creating business divisions for different segments and highlights the company’s flexibility to adapt to the evolving green energy landscape.

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