L&T in talks with Itochu for minority stake in clean energy arm, Kandla ammonia project targets exports

Larsen & Toubro (L&T) is in discussions with Japan-based Itochu Corporation for a minority investment in its wholly owned clean energy subsidiary, L&T Energy GreenTech Ltd (LTEGL).

The discussions are taking place alongside an existing green ammonia offtake arrangement linked to LTEGL’s planned project at Deendayal Port in Gujarat.

Subramanian Sarma, Deputy Managing Director and President of L&T, said the group was discussing equity participation with Itochu in addition to the offtake agreement. He did not disclose the potential size of the stake.

Kandla project positioned as export hub

LTEGL is developing a 300,000 tonnes per annum green ammonia plant at Deendayal Port, formerly known as Kandla Port.

L&T acquired land at the port last year for green hydrogen and green ammonia projects. The company’s FY26 annual report describes the site as a strategic export hub for green hydrogen derivatives.

LTEGL has received equity support from its parent company through rights issues, including funding linked specifically to the Kandla green ammonia project.

Offtake agreement links project to marine fuel demand

In April, LTEGL signed a long-term take-or-pay agreement covering the supply of 300,000 tonnes of green ammonia annually from the planned facility.

Under a take-or-pay arrangement, the buyer is required to pay for the contracted volume regardless of whether the full quantity is taken for delivery. Such agreements can provide greater revenue visibility for projects and support financing decisions.

Green ammonia produced at Kandla is expected to support Itochu’s bunkering operations in Singapore and other locations, potentially positioning the fuel for use in the marine sector.

Strategic investment could support project financing

Bringing an offtaker into a project as an equity investor can strengthen the financing structure of capital-intensive green hydrogen and ammonia developments.

These projects require substantial upfront investment and typically involve long construction periods. Their commercial viability is also influenced by electricity costs, electrolyser efficiency, export infrastructure and long-term customer commitments.

Itochu’s participation could additionally provide LTEGL with access to overseas markets and potential customers.

Industry sources said LTEGL could also evaluate minority stake sales in other green ammonia projects to international partners as it seeks external capital to support its wider project pipeline.