L&T in talks to sell minority stake in clean energy arm to Japan's Itochu; eyes Kandla as green ammonia export hub

L&T is looking at the Kandla project as a strategic export hub for green hydrogen derivatives

Mumbai: Engineering conglomerate Larsen & Toubro is in talks with Japan's Itochu Corporation to sell a minority stake in its wholly-owned clean energy unit.

The Japanese general trading giant is also partnering with L&T Energy GreenTech Ltd (LTEGL) in developing and commercialising a 300 kilo tonnes per annum (ktpa) green ammonia project at Kandla in Gujarat.


"We are in discussion with Japan's Itochu group for equity participation, in addition to the green ammonia offtake," Subramanian Sarma, deputy managing director and president, L&T told ET.

He didn't disclose the size of Itochu may acquire.

LTEGL had earlier raised equity from its parent through rights issues, including an issue specifically intended for the green ammonia development project at Deendayal Port, formerly Kandla Port.

LTEGL is building the project in Kandla on a sizeable land parcel acquired by L&T last year for building green hydrogen and green ammonia projects.

This April, LTEGL signed a long-term take-or-pay agreement to supply 300,000 tonnes per annum of green ammonia from the proposed facility.

Through this partnership with LTEGL, supplies from Kandla are expected to support Itochu's bunkering operations in Singapore and other locations, enabling the early adoption of green ammonia as a next-generation marine fuel and support the shipping industry's transition towards low-carbon operations.

LTEGL may also evaluate offering minority stakes in its green ammonia projects to other international partners, as it seeks to bring external capital into the business and strengthen the financing of its planned projects, said industry sources.

L&T's FY26 annual report identified the 300 KTPA Kandla project as a key part of its energy transition strategy. The move to onboard international equity partners comes as developers of large green hydrogen and ammonia projects increasingly look to combine project development expertise, long-term offtake and capital from strategic partners to improve the bankability of projects. L&T is looking at the Kandla project as a strategic export hub for green hydrogen derivatives.

The company has been building a broader clean energy platform spanning green hydrogen and green ammonia.